HOUSE 


No.  1850 


HD 


REPORT 


DOO^JEMTS 


SPECIAL  COMMISSION  ON  SOCIAL 

INSURANCE. 


FEBRUARY,  1917 


BOSTON: 

IIGHT  &  POTTER  PRINTING  CO.,  STATE  PRINTERS, 
*  32   DERNE  STREET. 

*  1917. 


EXCHANGE 


DOCUMENTS 
DEPT. 


Cfce  Commontoealtft  of  S@a00ac!w0ett0,  s^ 


BOSTON,  MASS.,  January,  1917. 
To  the  General  Court  of  Massachusetts. 

The  Special  Recess  Commission  on  Social  Insurance,  au- 
thorized by  chapter  157  of  the  Resolves  of  the  year  1916  to 
make  certain  investigations,  has  completed  its  work  and  begs 
leave  to  present  the  following  report. 

\ 
Respectfully  submitted, 

; 

FRANK  S.  FARNSWORTH, 

Chairman. 


f> 


MEMBERS  OF  COMMISSION. 


SENATOR  FRANK  S.  FARNSWORTH  OF  LEOMINSTER,  Chairman. 
SENATOR  WALTER  E.  McLANE  OF  FALL  RIVER. 
REPRESENTATIVE  ALLISON  G.  CATHERON  OF  BEVERLY. 
REPRESENTATIVE  EDEN  K.  BOWSER  OF  WAKEFIELD. 
REPRESENTATIVE  HARRY  C.  WOODILL  OF  MELROSE. 
REPRESENTATIVE  EDWARD  G.  MORRIS  OF  BOSTON. 
WENDELL  P.  THORfi  OF  BOSTON. 
JOHN  P.  MEADE  OF  BROCKTON. 
EDNA  LAWRENCE  SPENCER  OF  CAMBRIDGE. 


JOHN  D.  WRIGHT  OF  BOSTON,  Secretary. 


40453 


EEPOET   OF  THE   SPECIAL  COMMISSION" 
ON   SOCIAL  INSUEAlsrCE. 


CHAPTER  157,  RESOLVES  OP  1916. 

RESOLVE  PROVIDING  FOR  THE  APPOINTMENT  OF  A  SPECIAL  RECESS  COM- 
MISSION ON  SOCIAL  INSURANCE. 

Resolved,  That  a  special  commission,  to  be  composed  of  two  members 
of  the  Senate  to  be  appointed  by  the  president,  four  members  of  the  house 
of  representatives  to  be  appointed  by  the  speaker,  and  three  other  persons 
to  be  appointed  by  the  governor,  shall  sit  during  the  recess  of  the  general 
court,  and  shall  be  known  as  the  Commission  on  Social  Insurance.  It  shall 
be  the  duty  of  the  said  commission  to  study  the  effects  of  sickness,  un- 
employment and  old  age  in  Massachusetts,  to  collect  facts  as  to  actual 
experience  with  the  several  forms  of  insurance  therefor,  and  to  recommend 
to  the  general  court  such  legislation  as  it  may  deem  practical  and  expedi- 
ent to  protect  the  wage-earners  of  the  commonwealth  from  the  burdens  of 
sickness,  unemployment  and  old  age,  or  any  one  or  more  of  these.  The 
state  department  of  health  and  the  bureau  of  statistics  are  authorized 
and  directed  to  co-operate  with  the  commission  in  every  way  feasible  in 
carrying  out  the  purpose  of  this  resolve,  and  in  case  either  or  both  of  said 
departments  shall  undertake  investigations  deemed  necessary  by  the 
commission,  they  shall  be  allowed  for  their  necessary  expenses,  outside  their 
regular  appropriations,  such  sums  as  shall  be  approved  by  the  governor 
and  council. 

The  commission  shall  report  to  the  next  general  court  with  drafts  of 
such  laws  as  it  may  recommend,  and  it  shall  file  its  report  with  the  clerk 
of  the  senate  or  with  the  clerk  of  the  house  not  later  than  the  first  Wednes- 
day in  January. 

The  commission  shall  have  a  room  in  the  state  house  assigned  for  its 
use,  shall  give  such  public  hearings  as  it  may  deem  necessary,  may  em- 
ploy such  assistance,  clerical  or  otherwise,  as  it  may  require,  and  shall 
receive  such  sums  for  clerical  assistance,  travel  and  other  expenses,  and 
for  the  compensation  of  its  members  as  shall  be  allowed  by  the  governor 
and  council.  [Approved  June  1, 1916. 

Subsequently  the  duty  of  making  a  further  special  investi- 
gation was  laid  upon  the  Commission  so  created  by  chapter 
164  of  the  Resolves  approved  June  .2,  1916,  which  is  as  fol- 
lows :  — 


8  '  'SOCIAL  INSURANCE.  [Feb. 

CHAPTER  164,  RESOLVES  OF  1916. 

RESOLVE  REQUIRING  THE  SPECIAL  RECESS  COMMISSION  ON  SOCIAL  IN- 
SURANCE   TO    INCLUDE    IN    ITS    INVESTIGATION    AND     REPORT     THE 

SUBJECT  OF  THE  HOURS  OF  LABOR  IN  INDUSTRIES  OPERATED  CON- 
TINUOUSLY FOR  TWENTY-FOUR  HOURS. 

Resolved,  That  the  special  recess  commission  on  social  insurance  estab- 
lished by  chapter  one  hundred  and  fifty-seven  of  the  resolves  of  the  year 
nineteen  hundred  and  sixteen,  in  addition  to  the  matters  already  referred 
to  said  commission,  shall  study  and  investigate  the  subject  of  reasonable 
restrictions  in  the  hours  of  labor  in  industries  operated  continuously  for 
twenty-four  hours,  and  shall  include  in  its  report  to  the  next  general  court 
such  recommendations,  with  drafts  of  proposed  legislation,  as  it  may 
deem  practical  and  expedient.  All  the  provisions  of  said  chapter  shall,  so 
far  as  pertinent,  apply  to  the  investigation  herein  authorized.  [Approved 
June  2,  1916. 

INTRODUCTION. 

Pursuant  to  the  earlier  resolve,  the  following  persons  were 
appointed  to  serve  as  members  of  the  Special  Recess  Commis- 
sion on  Social  Insurance  by  His  Excellency  Samuel  W.  McCall, 
Governor  of  the  Commonwealth :  - 

Wendell  P.  Thore"  of  Boston. 
John  P.  Meade  of  Bfockton. 
Edna  Lawrence  Spencer  of  Cambridge. 

By  the  Hon.  Henry  G.  Wells,  President  of  the  Senate:  - 

Senator  Frank  S.  Farnsworth  of  Leominster. 
Senator  Walter  E.  McLane  of  Fall  River. 

By  the  Hon.  Channing  H.  Cox,  Speaker  of  the  House  of 
Representatives :  — 

Representative  Allison  G.  Catheron  of  Beverly. 
Representative  Eden  K.  Bowser  of  Wakefield. 
Representative  Harry  C.  Woodill  of  Melrose. 
Representative  Edward  G.  Morris  of  Boston. 

The  Commission  held  its  first  meeting  on  July  12,  1916, 
when  it  organized  by  electing  the  Hon.  Frank  S.  Farnsworth 
AS  chairman,  and  John  D.  Wright  as  secretary. 


1917.]  HOUSE  — No.  1850.  9 

The  Commission  desires  to  record  its  appreciation  of  the 
valuable  and  devoted  services  of  Mr.  Wright  as  secretary  of  the 
Commission. 

SUMMARY  or  WORK  OF  COMMISSION. 

In  the  conduct  of  its  work  the  Commission  has  carried  on 
several  special  investigations  more  particularly  described  in  the 
body  of  the  report.  It  has  held  fourteen  public  hearings. 
Most  of  these  were  at  the  State  House  in  Boston,  but  hearings 
were  also  conducted  in  Pittsfield,  Holyoke,  Fitchburg,  Lowell, 
Worcester,  Fall  River  and  New  Bedford.  For  the  purpose  of 
securing  by  direct  observation  knowledge  of  conditions  in  in- 
dustries operated  continuously  for  twenty-four  hours  a*  day, 
the  Commission  visited  both  by  day  and  night  several  paper 
mills  engaged  in  the  manufacture  of  different  grades  of  paper. 

Upon  the  request  of  the  Commission  that  it  be  authorized 
to  attend  the  National  Conference  on  Social  Insurance  at 
Washington  on  December  7,  8  and  9,  the  Council  authorized 
and  selected  three  members  of  the  Commission  to  attend  the 
conference  on  behalf  of  the  Commission.  The  State  Depart- 
ment of  Health  and  the  Bureau  of  Statistics  have  co-operated 
with  this  Commission  as  directed  by  the  Resolve.  The  Com- 
mission takes  this  occasion  to  acknowledge  the  valuable  aid 
given  by  each  department  as  far  as  possible  within  its  limited 
time,  and  the  courtesy  with  which  the  services  of  these  depart- 
ments have  been  placed  at  its  disposal. 

The  Commission  has  also  held  thirty-two  executive  sessions 
besides  numerous  conferences  with  individuals  who  had  special 
knowledge  of  the  subjects  before  it.  There  have  been  in  addi- 
tion many  meetings  of  subcommittees,  which  were  appointed, 
as  follows :  — 

Old-Age   Pensions  —  Mr.    Thore*,    Senator   Farnsworth,    Representative 

Woodill. 

Unemployment  —  Mr.  Meade,  Miss  Spencer,  Representative  Morris. 
Health  Insurance  —  Representative    Catheron,    Representative    Bowser, 

Senator  McLane. 

Among  the  more  valuable  services  of  the  Bureau  of  Statistics 
was  the  preparation  by  Miss  Moldenhauer,  under  the  super- 


10  SOCIAL  INSURANCE.  [Feb. 

vision  of  the  Bureau,  of  a  summary  of  the  legislation  of  the 
principal  countries  of  the  world  which  have  provided 
of  insurance  for  sickness,  unemployment  and  old  age.  An 
examination  has'  been  made  of  the  original  sources  in  their 
original  language,  and  the  work  has  been  brought  as  nearly 
up  to  the  present  moment  as  conditions  permitted.  This  sum- 
mary is  printed  in  the  Appendix  to  the  report. 

The  State  Department  of  Health  in  August  assigned  Dr. 
William  W.  Wolcott  of  that  department  to  the  special  work  of 
this  Commission.  Dr.  Wolcott  had  preparation  for  work  of 
this  character,  acquired  both  in  private  and  in  public  ser 
He  has  kept  in  close  touch  with  the  Commission,  attending  its 
hearings  and  many  of  its  executive  sessions.  By  special  au- 
thority of  the  Council  he  attended  the  Public  Health  Confer- 
ence at  Cincinnati,  where  the  subject  of  health  insura; 
considered.  While  on  this  trip  he  investigated  private  mutual 
systems  of  insurance  against  sickness  existing  in  some  middle 
western  States. 

Dr.  Wolcott's  report  to  this  Commission  of  the  conference 
at  Cincinnati  and  of  the  special  investigations  conducted  by 
him  is  printed  in  Appendix  A  (page  178). 

RECOMMENDATIONS. 

As  a  result  of  its  investigations  and  considerations  the  Com- 
mission recommends  the  enactment  of  the  following  legisla 
and  submits  bills  therefor  as  directed:    An  Act  to  establish  a 
State  Board  of  Employment,  printed  in  Appendix  C  (page  274). 

THE  PROBLEM  OF  POVERTY. 

The  duty  laid  upon  this  Commission  of  studying  the  effects 
of  sickness,  unemployment  and  old  age  in  Massachusetts 
brought  before  it  at  once  the  general  problem  of  poverty.  Per- 
sons of  large  means  are  not  concerned  with  unemployment  as 
an  economic  problem,  and  while  they  may  not  altogether  avoid 
sickness  and  old  age,  they  have  resources  with  which  to  meet 
at  least  their  financial  burdens.  But  to  those  who,  from  lack 
of  thrift  or  lack  of  opportunity,  have  made  no  provision  for 


1917.]  HOUSE  — No.  1850.  11 

the  time  of  special  stress  these  three  gaunt  specters  of  human 
bring  a  train  of  misery  and  evil  consequences  not  limited 
to  the  individual,  but  attacking  the  social  structure  of  which 
he  is  a  part. 

Any  attempt  at  eradicating  poverty  or  mitigating  its  evils 
involves  a  recognition  of  the  fact  that  its  causes  and  conse- 
quences are  many.  This  Commission,  therefore,  cannot  pro- 
ceed to  a  discussion  of  the  phases  of  social  insurance,  to  which 
it  has  been  particularly  required  to  direct  its  attention,  with- 
out a  preliminary  review  of  what  are  in  its  opinion  some  of 
the  more  important  causes  of  poverty.  It  has  made  no  special 
study  of  these  causes,  and  undertakes  here  to  do  nothing  more 
than  direct  attention  to  some  of  them  for  the  purpose  of 
showing  that  no  system  of  social  insurance,  as  the  term  is  gen- 
erally understood,  even  including  insurance  against  sickness, 
unemployment  and  old  age,  can  be  altogether  successful  unless 
an  adequate  survey  is  made  of  fundamental  causes  of  poverty 
and  means  of  relief.  In  enumerating  these  causes  and  means 
of  relief  no  attempt  is  made  to  be  exhaustive  or  to  assign  the 
order  of  their  importance. 

1.  Feeble-mindedness.  —  An  examination  of  the  social  struc- 
ture of  Massachusetts  reveals  at  the  bottom  a  class  of  indi- 
viduals too  weak  mentally  to  be  self-supporting.  They  form, 
according  to  Dr.  Fernald  of  the  Concord  Reformatory,  some- 
thing like  15  per  cent,  of  its  population,  and  there  is  above 
this  group  an  additional  42  per  cent,  so  far  subnormal  that 
their  capacity  for  self-support  is  problematical.  According  to 
Dr.  Elizabeth  S.  Sullivan  of  the  Reformatory  for  Women  the 
feeble-minded  and  subnormal  form  about  45  per  cent,  of  its 
population.  Special  studies  undertaken  in  the  Boston  Municipal 
Court,  in  the  State  Prison,  and  in  several  of  our  jails  and 
houses  of  correction,  show  that  the  feeble-minded  or  mentally 
defective  constitute  a  large  element  in  our  criminal  population. 
The  Commonwealth  provides  special  institutions  for  this  class, 
where  they  may  lead,  so  far  as  they  are  capable,  happy,  pro- 
tected lives.  These  institutions  house  about  2,600. 

At  large  in  the  community  there  are  variously  estimated  to 
be  from  10,000  to  15,000  feeble-minded  persons.  The  feeble- 


12  SOCIAL  INSURANCE.  [Feb. 

minded  are  seldom  if  ever  permanently  self-supporting.  They 
fill  our  prisons,  almshouses  and  other  charitable  institutions. 
They  present  insoluble  problems  to  our  courts.  Their  special 
significance  in  a  study  of  poverty  is  that  their  feeble-minded- 
ness  is  incurable  and  very  highly  inheritable,  and  that  they 
are  very  much  more  prolific  than  members  of  the  community 
in  general.  In  mingling  with  the  general  population  they 
introduce  a  weakening  strain  which  tends  to  lower  greatly  the 
capacity  of  that  population  for  normal  self-support.  They  are 
a  problem  clearly  recognized  by  its  students,  who  agree  that 
the  least  that  can  be  done  is  to  segregate  feeble-minded  females 
of  child-bearing  age. 

2.  Insanity.  —  In  the  State  hospitals  for  the  insane,  feeble- 
minded  and   epileptic   this   Commonwealth  was  in  1915  sup- 
porting   17,051    individuals    at   an    expense    of    $4,031,352.68. 
Much   insanity   is   preventable,    some    is   incurable;     some    is 
caused  by  intemperance,  some  by  sexual  immorality.     So  far 
as  it  is  preventable  and  curable,  it  presents  one  of  the  prob- 
lems of  poverty  to  which  the  State  should  at  least  give  the 
degree  of  attention  which  it  has  hitherto  given  the  problem  of 
relief. 

3.  Intemperance.  —  The  total  consumption  of  alcoholic  bev- 
erages in  the  United  States  in  1915  was  2,015,595,291  gallons, 
or  19.80  gallons  per  capita.     We  do  not  have  the  figures  for 
Massachusetts,  but  there  is  evidence  that  consumption  is  very 
great. 

Economically  the  money  spent  in  the  purchase  of  these 
liquors  was  waste  which,  even  without  the  other  social  conse- 
quences entailed  by  the  consumption  of  so  much  liquor,  could 
hardly  be  disregarded  in  any  study  of  poverty.  According 
to  the  report  of  the  Commission  to  investigate  drunkenness 
there  were  for  the  year  ending  Sept.  30,  1913,  104,936  arrests 
for  drunkenness  in  Massachusetts.  The  same  Commission 
estimated  that  alcoholism  caused  at  least  one-third  of  all  crimes 
other  than  drunkenness.  We  should  also  bear  in  mind  that 
the  arrested  drunkards  are  only  a  fraction  of  all  drunkards  or 
of  those  whose  earning  powers  are  lessened  by  alcoholism.  Any 
estimate  of  the  earnings  lost  on  account  of  alcoholism  would  be 
enormous.  The  alcoholic  is  seldom  permanently  self-supporting. 


1917.]  HOUSE  — No.  1850.  13 

He  readily  falls  into  crime,  and  leads  a  disordered  life,  the 
general  direction  of  which  is  toward  poverty. 

The  Commission  to  investigate  the  Increase  of  Criminals, 
Mental  Defectives,  Epileptics  and  Degenerates  reported  m 
1911:- 

It  is  the  belief  of  this  Commission,  based  on  long  personal  observation 
that  the  abuse  of  alcohol,  directly  and  indirectly  does  more  to  fill  our 
prisons,  insane  hospitals,  institutions  for  the  feeble-minded  and  alms- 
houses  than  all  other  causes  combined. 

In  our  opinion  the  adoption  of  any  means  by  which  the 
consumption  of  alcoholic  liquors  in  this  Commonwealth  can  be 
greatly  reduced  will  go  far  to  prevent  and  relieve  poverty. 

4.  Wages.  --  This  Commission  recognizes  that  it  is  normal  and 
desirable  that  the  individual  should  himself  make  adequate  pro- 
vision for  the  hazards  of  life.     To  do  this  he  must  receive  for 
his  services  a  living  wage,  that  is,  a  wage  not  only  sufficient  to 
support  himself  and  his  family  in  health,  but  to  provide  against 
sickness,    unemployment   and   old   age.     Whatever   stimulates 
or  retards  industry,   or  affects  the   supply  of  labor,   has  its 
effect  upon  wages.     The  Commission  here  simply  desires  to 
record  its  recognition  that  such  economic  problems  as  the  tariff, 
immigration,  taxation  and  the  minimum  wage  cannot  be  di- 
vorced from  a  consideration  of  the  subject  specially  assigned 
to  it. 

5.  Vocational    Training.  —  Whatever  produces   a   more   effi- 
cient worker  increases  the  likelihood  of  his  earning  living  wages 
and  of  making  suitable  provision  for  the  hazards  of  life.     A 
beginning   has   been   made   in   this   Commonwealth    in   special 
vocational  and  industrial   training.     Such  training  should  be 
much  more  generally  provided. 

6.  Thrift.  —  Evidence  has  been  given  before  this  Commis- 
sion  of  instances  where  individuals  of  even   very  low  wage- 
earning  capacity  have  accomplished  remarkable  results  by  the 
continuous  practice  of  thrift.     However  appalling  the  situation 
of  the  lowest-paid  wage  earner  appears  in  this  Commonwealth, 
it  is  still  possible  for  individuals  and  families  to  push  from  the 
lowest  to  the  highest  economic  and  social  conditions  by  the 
exercise    of    intelligence,  thrift,  and,  let   it    honestly  be    said, 


14  SOCIAL  INSURANCE.  [Feb. 

good  luck.  Any  social  measure  which  tends  to  remove  the 
stimulus  to  such  endeavor  is  unwise.  Any  measure  which 
fosters  thrift  should  be  encouraged.  The  savings  systems  of 
our  schools  should  be  more  widely  extended.  The  savings 
banks,  co-operative  banks,  and  the  more  recently  introduced 
system  of  savings-bank  life  insurance,  are  examples  of  wisely 
directed  effort  under  State  encouragement. 

It  would  no  doubt  be  possible  to  set  forth  many  other  causes 
of  such  poverty  as  exists  in  this  Commonwealth  and  many 
other  measures  for  its  relief.  The  Commission  would  further 
record  its  recognition  of  the  fact  that  not  only  do  the  fore- 
going causes  produce  poverty,  but  poverty  in  turn  goes  far 
towards  creating  the  conditions  which  we  have  enumerated, 
and  so  the  vicious  circle  is  continued.  The  Commission  believes 
it  has  stated  enough  to  show  an  adequate  recognition  of  the 
complexity  of  the  problem  presented.  It  desires  at  this  point 
to  direct  the  attention  of  the  General  Court  to  certain  facts 
gathered  by  the  Bureau  of  Statistics  which  indicate  the 
economic  condition  of  the  wage-earning  group  in  this  Common- 
wealth, arid  which  must  be  borne  in  mind  in  considering  the 
advisability  of  introducing  any  system  of  social  insurance  for 
wage  earners. 

ECONOMIC  CONDITION  OF  WAGE  EARNERS  IN  MASSACHUSETTS. 

According  to  figures  computed  for  this  Commission  by  the 
Bureau  of  Statistics  the  average  wage  of  the  laborer  engaged 
in  manufacturing  industries  in  this  Commonwealth  in  1914  was 
$562.57.  The  Commission  recognizes  that  in  many  families 
there  is  frequently  more  than  one  earner.  It  recognizes,  also, 
that  in  the  ordinary  family  the  wages  of  the  father  should  be 
adequate  for  the  support  of  the  family.  There  appear  to  be 
no  accurate  statistics  regarding  the  family  incomes  of  wage 
earners. 

Statistical  averages  are,  however,  very  deceptive  unless  we 
realize  that  the  existence  of  many  families  with  incomes 
greater  than  the  average  stated  means  that  there  are  many 
other  families  whose  incomes  are  lower  than  the  average. 

Such  incomes  should  be  considered  in  relation  to  the  amount 
necessary  for  the  support  of  a  family.  According  to  a  study 


1917.]  HOUSE  — No.  1850.  15 

made  in  Boston  several  years  ago  it  was  estimated  that  proper 
provision  for  a  family  of  five  required  an  income  of  $900  a  year. 
But  if  we  assume  that  this  estimate  is  excessive,  though  it  may 
be  hard  to  show  where  the  excess  lies,  and  that  only  $700  is 
needed,  we  have  an  estimate  which  is  very  conservative,  par- 
ticularly in  view  of  the  increased  cost  of  living  since  the  original 
estimates  were  made.  With  a  majority  of  men  earning  $15 
a  week  or  less,  it  is  abundantly  clear  that  there  are  a  great 
many  individuals  who  can  have  no  substantial  savings  to  meet 
the  special  stress  of  sickness,  unemployment  or  old  age. 

Any  provision  for  sickness,  unemployment  and  old  age  by 
the  members  of  such  a  class  can  come  only  by  saving3  taken 
from  means  of  subsistence  already  too  low.  Such  saving  re- 
quires a  force  of  character  and  a  degree  of  thriftiness  which  can 
never  be  expected  from  the  group  as  a  whole.  Nor  is  it  suf- 
ficient to  say  that  the  individual  has  a  chance  to  fit  himself 
to  earn  better  wages  and  by  the  exercise  of  thrift  to  provide 
for  the  future.  While  that  statement  is  true,  to  a  degree,  of 
individuals  better  equipped  in  resolution,  intelligence  or 
physique  than  the  average,  it  is  not  true,  and  it  has  never 
been  true,  of  the  mass  of  any  large  industrial  population.  All 
of  us  know  cases  of  individuals  of  fair  earning  power  and 
thrifty  character  who  have  come  to  want  and  suffering  by 
reason  of  continued  illness  either  of  themselves  or  of  their  fam- 
ilies. Others  have  lost  the  savings  of  a  lifetime,  and  have  suf- 
fered a  pinched  old  age  because  their  natural  business  judgment 
or  their  training  was  not  such  as  to  enable  them  to  safeguard 
their  savings.  The  State  which  merely  counsels  thrift  to  such 
an  individual  but  mocks  him.  It  ought  not  to  be  too  difficult 
a  task  of  statesmanship  to  leave  unimpaired  sufficient  incentives 
to  thrift,  and  the  development  of  that  individual  sturdiness 
which  must  be  the  very  substance  and  strength  of  any  Nation, 
while  providing  that  a  man  who  makes  a  fair  attempt  to  earn, 
support  his  family  decently  and  save  something  shall  not  under 
any  circumstances  be  allowed  to  become  altogether  destitute 
or  required  to  accept  pauper  relief. 

The  problem  is  to  find  some  way  of  meeting  ills  of  which  the 
incidence  on  any  individual  is  uncertain,  but  which  will  cer- 
tainly fall  upon  many  individuals  in  the  class.  Though  the 


16  SOCIAL  INSURANCE.  [Feb. 

savings  of  any  one  may  be  insufficient  for  his  burden,  all 
together  can  bear  the  total  burden  if  some  way  can  be  found 
to  distribute  its  weight.  The  device  of  insurance  exists  for 
just  such  a  situation.  Nation  after  Nation  has  turned  to  it 
abroad,  and  in  various  schemes  of  social  insurance  has  pro- 
vided for  distributing  the  individual  hazards  of  sickness,  un- 
employment and  old  age.  In  the  Appendices  will  be  found  a 
summary  of  such  legislation. 

In  this  country  we  have  individually  adopted  the  principle 
of  insurance  on  a  vast  scale.  This  Commonwealth  has  made 
it  practically  compulsory  in  its  workmen's  compensation  act. 
It  has  recognized  the  value  of  the  principle  and  assisted  in 
establishing  it  as  a  voluntary  plan  in  the  system  of  savings 
bank  life  insurance.  The  existence  of  a  multitude  of  fraternal 
insurance  benefit  societies,  establishment  funds,  trade  unions 
and  private  companies  insuring  against  sickness,  unemploy- 
ment or  old  age  testify  to  popular  support  of  the  principle  as 
a  voluntary  scheme. 

This  Commission  is  unanimously  of  the  opinion  that  the  prin- 
ciple of  insurance  is  a  desirable  one  for  application  on  a  suf- 
ficiently wide  scale  to  safeguard  every  wage  earner  in  the 
Commonwealth  from  certain  of  the  evils  of  sickness,  unemploy- 
ment and  old  age. 

On  the  important  and  perhaps  fundamental  questions  of 
whether  the  time  is  ripe  for  the  adoption  of  any  one  of  the 
plans  submitted,  whether  participation  in  any  plan  should  be 
compulsory  for  any  large  group  of  the  population,  whether  the 
cost  of  any  plan  should  be  borne  solely  by  the  State,  the  em- 
ployer or  the  employee,  or  should  be  shared  by  some  two  or 
all  of  them,  —  on  these  and  certain  other  questions  there  is 
some  divergence  of  opinion  in  the  Commission,  which  will  be 
indicated  as  each  of  the  three  subjects  —  sickness,  unemploy- 
ment and  old  age  —  is  separately  treated. 


SICKNESS  OR  HEALTH  INSURANCE. 

Prior  to  the  appointment  of  this  Commission  little  attention 
had  been  given  in  Massachusetts  to  the  question  of  the  advis- 
ability of  adopting  some  general  system  of  health  insurance 


1917.]  HOUSE  — No.  1850.  17 

for  wage  earners.  The  first  health  insurance  bill  was  filed  with 
the  General  Court  of  1916.  It  did  not  attract  much  notice. 
Simultaneously  with  the  consideration  of  the  subject  by  this 
Commission,  however,  there  has  been  a  very  general  awakening 
of  interest  among  employers,  employees,  medical  men  and  the 
public.  The  subject  has  been  considered  by  many  groups  and 
committees.  Evidence  given  before  this  Commission  at  various 
hearings  and  conferences  satisfies  it  that  even  among  those  who 
have  given  particular  study  to  the  subject  opinion  has  not  yet 
crystallized.  Most  groups  appear  to  recognize  the  importance 
of  the  subject,  and  to  desire  further  opportunity  for  study 
before  undertaking  legislation. 

In  the  opinion  of  this  Commission,  legislation  on  a  subject 
of  such  magnitude  and  importance,  and  affecting  so  vitally 
such  a  large  proportion  of  the  inhabitants  of  the  Common- 
wealth, should  and  probably  must  be  adopted,  if  at  all,  only 
after  thorough  study  and  discussion,  not  only  by  such  a  com- 
mission as  our  own  and  by  committees  of  the  Legislature,  but 
by  the  principal  groups  affected  and  by  the  public. 

The  Commission  is  therefore  unanimous  in  not  recommending 
any  health  insurance  ^legislation  for  immediate  passage.  Some 
of  the  Commission,  while  subscribing  to  the  foregoing  recom- 
mendation, are  of  the  opinion  that  the  Commonwealth,  as  soon 
as  there  has  been  adequate  consideration  of  the  details  of  leg- 
islation, should  adopt  a  general  system  of  health  insurance  for 
wage  earners,  supported  by  enforced  contributions  from  em- 
ployers, employees  and  the  State,  and  that  such  legislation  is 
likely  to  prove  of  the  greatest  value  in  relieving  distress  and 
promoting  the  general  welfare.  Others  of  the  Commission  have 
filed  dissenting  statements  which  will  be  found  on  the  pages 
following. 

PRESENT  HEALTH  INSURANCE  AGENCIES. 

Any  legislative  consideration  of  the  subject  should  be  based 
upon  a  knowledge  of  conditions  as  they  now  exist.  This  Com- 
mission has  therefore  attempted  to  ascertain  to  what  extent 
insurance  against  sickness  now  exists  in  this  Commonwealth 
under  voluntary  plans.  Its  investigations  have  disclosed  a 
great  variety  of  organizations  furnishing  sickness  insurance. 


; 


18  SOCIAL  INSURANCE.  [Feb. 

Among  them  are  private  insurance  companies,  establishment 
funds  or  benefit  societies  connected  with  particular  industries, 
trade  unions,  fraternal  organizations  and  small  mutual  groups 
with  only  the  semblance  of  organization,  where  sometimes  the 
only  plan  being  to  "pass  the  hat"  in  case  of  special  distress  of 
a  member.  A  statement  in  detail  of  the  Commission's  findings 
as  to  present  sickness  insurance  agencies  will  be  found  in 
Appendix  A. 

To  the  Commission  the  most  important  conclusion  reached 
from  the  examination  of  these  plans  is  that  there  exists  already 
in  the  Commonwealth  a  very  general  appreciation  of  the  value 
of  the  insurance  principle  as  a  protection  against  the  economic 
results  of  illness.  There  are  numerous  attempts  among  wage 
earners  to  apply  the  principle  in  various  insurance  plans.  The 
results,  however,  fall  very  far  short  of  the  ideal.  The  Commis- 
sion was  unable  to  find  just  how  many  wage  earners  were 
insured.  Although  insurance  plans  are  numerous,  it  is  sat- 
isfied that  the  number  of  wage  earners  insured  against  illness 
is  far  less  than  the  total  number.  It  is  apparent,  too,  that  the 
uninsured  class  includes  the  highest  proportion  of  the  thriftless 
and  of  those  of  very  small  means.  An  examination  of  the  plans 
of  insurance  reveals,  further,  very  few  that  make  adequate 
provision  for  the  economic  stress  occasioned  by  the  combined 
effect  of  unemployment  and  the  sickness  which  causes  it. 


AMOUNT  OF  SICKNESS. 

As  to  the  amount  of  sickness  now  existing  among  wage 
earners  in  Massachusetts  the  Commission  has  no  definite 
statistics. 

The  most  important  recent  study  of  conditions  in  any  part 
of  Massachusetts  is  that  made  under  the  direction  of  L.  K. 
Frankel  and  Louis  I.  Dublin  for  the  Metropolitan  Life  Insur- 
ance Company.  This  was  a  survey  of  sickness  in  Boston  during 
the  two  weeks  beginning  July  17  and  July  24,  1916,  and  was 
a  canvas  of  about  13  per  cent,  of  the  population  of  Greater 
Boston.  The  survey  disclosed  19.6  persons  sick  in  each  1,000 
persons  canvassed.  This  rate  is  distinctly  lower  than  that 
disclosed  by  the  surveys  made  by  the  same  persons  in  other 


1917.]  HOUSE  — No.  1850.  19 

cities  outside  of  Massachusetts.  Part  of  the  favorable  result 
may  be  due  to  the  season  chosen  for  the  survey.  Yet,  even 
assuming  that  the  average  experience  for  the  year  is  no  worse 
than  that  indicated  by  the  survey,  it  means  that  each  individual 
suffered  7.15  days  of  illness  during  the  year.  This,  of  course, 
is  not  the  figure  for  employed  persons.  The  report  states  that 
sickness  involving  disability  for  work  was  18.1  per  1,000  in  the 
case  of  males,  and  that  the  same  rate  was  observed  for  females. 
It  may  be  noted  that  this  result  is  contrary  to  the  usual  ex- 
perience, which  shows  a  higher  sickness  rate  among  women 
than  among  men.  This  would  mean  for  each  person  in  a 
year  6.6  days  involving  disability  for  work.  The  rates  for 
sickness  involving  disability  for  work  increased  regularly  with 
age  for  both  sexes. 

As  to  duration  of  illness  up  to  date  of  the  inquiry,  the  report 
states  that  20.3  per  cent,  reported  durations  of  illness  less 
than  one  month,  39.11  per  cent,  were  reported  sick  for  less 
than  three  months  and  48.4  per  cent,  showed  a  sickness  period 
of  less  than  six  months. 

For  present  purposes  it  is  unnecessary  to  go  further  into  the 
details  of  this  report.  The  report  shows  that  even  though  the 
condition  of  Boston  may  be  somewhat  better  than  that  of 
certain  other  cities  of  the  country,  there  still  exists  a  large 
amount  of  sickness  involving  financial  loss  and  suffering,  and 
this  loss  is  very  unevenly  distributed,  pressing  especially  hard 
in  many  cases  on  account  of  the  uncertainty  of  the  incidence 
and  the  duration  of  illness. 

A  study  made  by  the  Instructive  District  Nursing  Associa- 
tion of  Boston,  the  results  of  which  were  presented  to  this 
Commission,  gave  valuable  evidence  as  to  present  medical  care 
among  the  very  poor.  All  patients  under  care  of  the  associa- 
tion on  Sept.  27,  1916,  were  studied.  There  were  1,038  cases. 
It  appeared  that  9|  per  cent,  of  the  families  had  no  medical 
care  preceding  the  visit  of  the  district  nurse,  although  all  were, 
in  the  opinion  of  the  visiting  nurse,  in  need  of  medical  care. 
The  proportion  not  having  had  medical  care  increases  as  the 
income  decreases,  being  7  per  cent,  for  the  highest  and  13  per 
cent,  for  the  lowest  income  group.  In  the  outlying  districts, 
where  hospitals  and  dispensaries  are  not  so  numerous  or  acces- 


20  SOCIAL  INSURANCE.  [Feb. 

sible  as  in  the  central  part  of  the  city,  the  proportion  of  fam- 
ilies without  prior  medical  care  was  larger.  In  that  part  of 
Boston  known  as  Forest  Hills,  of  the  families  with  incomes  of 
less  than  $12  a  week  nearly  50  per  cent,  had  had  no  prior 
medical  care,  while  in  families  of  the  same  income  in  the  North 
and  West  Ends,  barely  1  per  cent,  had  had  no  medical  care. 

The  conclusion  drawn  by  the  nursing  association,  which  we 
adopt  as  sound,  is  that  even  in  the  city  of  Boston,  in  the  out- 
lying sections,  families  do  not  receive  the  medical  care  which 
they  need  in  many  cases,  chiefly  for  the  reason  that  they  do 
not  feel  they  can  afford  it.  Many  who  do  receive  medical 
care  receive  it  later  than  they  should.  The  association  reports 
that  in  the  central  part  of  the  city  most  of  the  families  investi- 
gated were  dependent  upon  medical  charity  for  which  the 
physicians  treating  them  receive  no  compensation. 

These  reports  and  other  evidence  given  before  the  Com- 
mission confirm  the  prevailing  impression  of  those  acquainted 
with  conditions  that  there  exists  a  large  amount  of  suffering 
from  poverty  and  illness  in  this  Commonwealth,  and  that  even 
in  a  district  as  well  supplied  with  medical  and  hospital  facil- 
ities as  Boston,  competent  medical  service  actually  fails  to 
reach  a  substantial  portion  of  the  very  poor.  These  facts  point 
to  the  need  of  a  better  organization  of  medical  service,  includ- 
ing an  extension  of  the  present  system  of  hospitals  and  dis- 
pensaries. In  the  opinion  of  several  of  the  Commission  these 
facts  also  point  to  the  need  of  a  system  of  health  insurance  for 
the  purpose  of  better  meeting  the  financial  burdens  of  sickness, 
a  system  which  if  adopted  at  all  must  be  so  related  to  our 
medical  and  hospital  service  as  to  improve  rather  than  injure 
that  service. 

For  convenience  in  studying  this  problem  there  are  presented 
in  Appendix  A,  page  149,  drafts  of  health  insurance  bills  sub- 
mitted to  this  Commission. 

In  Appendix  A,  page  174,  the  Commission  also  submits  a 
statement  relative  to  the  cost  of  sickness  among  wage  earners 
in  the  Commonwealth.  The  total  yearly  cost  of  sickness  to 
the  employees  in  Massachusetts  is  estimated  at  $38,770,167,  or 
an  average  of  $25.70  per  person  each  year.  These  estimates 


1917.]  HOUSE  —  No.  1850.  21 

are  based  on  an  investigation  conducted  by  the  Commission 
among  the  labor  unions  in  the  State. 

From  the  answers  received  in  connection  with  the  investi- 
gation as  to  the  amount  of  insurance  carried  by  workers,  an 
estimate  of  the  cost  of  accidents  to  wage  earners  who  were 
members  of  the  unions  investigated  was  also  made.  These 
may  be  found  in  Appendix  A,  page  177. 

For  services  in  connection  with  both  these  investigations  the 
Commission  is  indebted  to  Paul  H.  Means  and  A.  E.  0. 
Munsell,  members  of  classes  in  economics  under  R.  F.  Foerster, 
assistant  professor  of  social  ethics,  Harvard  University. 

FRANK  S.  FARNSWORTH. 
ALLISON  G.  CATHERON. 
EDEN  K.  BOWSER. 
HARRY  C.  WOODILL. 
EDWARD  G.  MORRIS. 
JOHN  P.  MEADE. 
EDNA  LAWRENCE  SPENCER. 
WENDELL  P.  THORE. 


22  SOCIAL  INSURANCE.  [Feb. 


REPORTS  ON  HEALTH  INSURANCE. 


STATEMENT  OF  ALLISON  G.  CATHERON,  EDEN  K  BOWSER, 
FRANK  S.  FARNSWORTH  AND  HARRY  C.  WOODILL. 

I  The  undersigned  members  of  the  Commission  believe  that 
^as  soon  as  there  has  been  adequate  consideration  of  the  details 
of  legislation  the  Commonwealth  should  adopt  a  general  system 
of  health  insurance  for  wage  earners  supported  by  enforced 
contributions  from  employers,  employees  and  the  State,  and 
that  such  legislation  is  likely  to  prove  of  the  greatest  value  in 
relieving  distress  and  promoting  the  general  welfare. 

We  therefore  submit  a  statement  for  the  purpose  of  indicat- 
ing briefly  the  need  of  health  insurance,  and  some  of  the  prin- 
ciples which  in  our  opinion  should  be  adopted  in  any  health 
insurance  plan. 

We  are  satisfied  from  evidence  presented  to  the  Commission, 
and  from  our  owri  independent  observation,  that  the  suffering 
from  sickness  is  particularly  great  among  those  of  small  means. 
With  the  wage  earner  ill  there  is  the  combined  effect  of  loss 
of  income  and  increased  expense  occasioned  by  the  illness. 
Frequently,  this  combination  makes  it  necessary  for  the  family 
to  appeal  to  charity.  Various  studies  of  families  known  to 
charitable  organizations  have  shown,  according  to  testimony 
given  before  our  Commission,  that  in  from  one-third  to  three- 
quarters  of  all  these  cases  illness  of  some  one  in  the  family 
contributed  to  the  economic  breakdown. 

The  suffering  from  illness  directly  can  be  lessened  by  a 
higher  development  and  better  organization  of  medical  and 
hospital  care,  and  by  the  multiplication  of  hospitals  and  dis- 
pensaries. In  our  opinion,  however,  while  poverty  exists  as  it 
does  among  large'  numbers  of  our  industrial  population,  and 
as  it  is  likely  to  exist  in  at  least  the  immediate  future,  no  mere 
development  of  medical  facilities  and  organization  will  go  to 


1917.]  HOUSE  —  No.  1850.  23 

the  heart  of  the  problem.  The  only  remedy  which  does  so  — 
short  of  abolishing  poverty  altogether,  a  problem  discussed 
earlier  in  the  report  and  not  likely  to  find  immediate  solution 
-  is  one  which  distributes  the  burdens  of  illness  so  generally 
that  they  may  be  easily  borne,  taking  into  account  that  those 
responsible  for  illness  or  enjoying  the  benefit  of  its  prevention 
should  bear  some  share  in  its  cost.  No  new  device  is  needed 
for  this  purpose.  The  principle  of  insurance  has  been  generally 
recognized  as  adapted  for  just  such  a  situation,  —  a  situation 
where  loss  is  certain  to  fall  on  many  members  of  a  group,  but 
where  the  incidence  of  that  loss,  and  the  extent  to  which  it 
will  fall  on  individual  members,  is  uncertain. 

The  existence  of  numerous  voluntary  plans  of  insurance 
shows  a  general  belief  in  this  principle.  Even  industrial  insur- 
ance private  corporations  furnishing  only  a  small  death  benefit, 
hardly  more  than  enough  for  burial,  and  with  the  high  premium 
rates  required  by  the  expenses  of  weekly  collections  has  been 
deemed  of  such  value  by  the  wage  earners  of  the  Common- 
wealth that  in  the  last  insurance  year  they  paid  in  premiums 
the  sum  of  $12,251,000,  though  the  losses  paid  were  only 
$4,094,000.' 


VOLUNTARY  INSURANCE  OR  COMPULSORY  INSURANCE. 

/  Voluntary  insurance  has  never  reached  all  the  people  who 
freed  it.  Those  who  fail  to  take  it  need  it  most.  They  are 
the  thriftless  and  the  persons  of  smallest  means.  The  only 
way  to  secure  anything  like  the  universal  application  of  the 
insurance  principle  needed  for  its  greatest  efficiency  is  by  mak- 
ing the  plan  compulsory.  Such  has  been  the  experience  abroad. 
All  of  these  countries  which  have  adopted  compulsory  health 
insurance  have  had  preceding  it  a  high  development  of  vol- 
untary sickness  insurance,  some  of  them  to  a  much  greater 
extent  than  exists  in  Massachusetts. 

It  is  natural  to  oppose  any  compulsory  plan  on  the  ground 
that  it  is  an  un-American  infringement  of  the  principle  of 
personal  liberty.  We  submit  that  it  has  never  been  found 
un-American  to  adopt  compulsion  for  the  performance  of  any 

1  These  figures  are  furnished  by  the  Insurance  Commissioner. 


24  SOCIAL  INSURANCE.  [Feb. 

obligation  clearly  and  generally  recognized.  Free  and  com- 
pulsory education  is  a  fair  example.  Every  male  citizen  of 
Massachusetts  between  certain  ages  is  by  law  a  member  of  its 
militia  and  subject  to  military  duty  when  required.  Let  it 
once  be  recognized  clearly  that  every  citizen  has  a  duty  to 
prepare  himself  to  meet  the  hazards  of  life,  such  as  sickness, 
unemployment  and  dependent  old  age,  and  there  will  be  no 
difficulty  about  the  acceptance  of  the  principle  of  compulsion 
to  enforce  any  plan  deemed  effective,  particularly  when  the 
State  lends  its  assistance  to  the  plan.  We  believe  that  such 
a  duty  of  preparation  rests  upon  every  citizen.  If  he  fails  to 
make  such  provision  the  social  structure  suffers,  and ,  if  his 
failure  is  complete  the  State  suports  him.  .  In  theory,  then,  all 
citizens  should  be  compelled  to  make  such  provision.  But  it 
may  be  assumed  that  those  of  a  sufficiently  high  income  have 
an  adequate  surplus  to  meet  these  hazards,  and  compulsory 
insurance  plans  generally  exempt  such.  It  may  be  that  such 
persons  should  be  included  ultimately,  but  it  is  more  convenient 
to  exempt  them  at  the  outset.  As  a  practical  matter,  it  has 
been  found  difficult  to  devise  a  system  compulsory  upon  any 
but  wage  earners  employed  with  some  regularity.  The  reason 
for  this  limitation  is  that  deduction  from  wages  offers  the  most 
convenient  means  of  collecting  premiums.  It  may  be  that 
some  practical  compulsory  plan  of  wider  scope  can  be  devised. 
None  has  been  adopted  in  any  foreign  country,  and  none  has 
been  brought  to  the  attention  of  this  Commission.  In  our 
opinion  the  plan  of  widest  application  practicable  at  present 
is  one  which  shall  include  all  wage  earners  employed  with 
some  regularity  and  earning  less  than  a  given  wage.  We  are 
satisfied  that  it  is  wise  to  include  those  who  earn  less  than 
$100  a  month.  There  should  be  opportunity  for  any  one  to 
enter  the  plan  voluntarily. 


DISTRIBUTION  OF  COST. 

On  the  important  question  of  distributing  the  cost  of  insur- 
ance, we  are  impressed  with  the  soundness  of  the  arguments  of 
those  who  urge  that  the  cost  should  be  shared  by  employer, 
employee  and  the  State.  Each  is  to  a  degree  responsible  for 


1917.]  HOUSE  —  No.  1850.  25 

sickness.  This  statement  will  be  readily  admitted  as  to  the 
worker  himself,  who  can  exercise  a  great  degree  of  control  over 
his  individual  health.  But  he  is  unable  to  determine  alto- 
gether the  conditions  of  his  housing,  food,  drink  or  labor. 
These  are  among  the  conditions  under  the  control  in  some 
degree  of  the  State.  The  State  has  recognized  its  responsibility 
for  the  public  health  by  a  great  mass  of  legislation  altogether 
too  large  to  make  detailed  reference  to  here.  The  employer's 
responsibility  is  not  quite  so  clear,  but  we  are  satisfied  that  it 
exists.  Some  employers  urge  that  their  responsibility  does  not 
extend  beyond  occupational  diseases,  —  a  responsibility  which 
is  already  recognized  in  the  workmen's  compensation  law.  It 
should  be  recognized,  however,  that  there  are  many  cases  of 
disease  which  in  the  mass  may  be  found  to  be  due  to  occupa- 
tion, while  in  the  particular  case  it  may  be  impossible  to  trace 
the  causation.  Further,  it  is  evident  that  the  employer  and 
not  the  employee  determines  the  working  conditions  as  to 
light,  air,  dust  and  other  matters  affecting  health. 

If  an  employer  has  indeed  conformed  to  the  best  present- 
day  knowledge  in  establishing  healthful  conditions  in  his  plant, 
it  may  be  that  he  should  not  in  such  a  particular  case  be 
charged  with  further  responsibility  for  disease.  Such  a  case, 
however,  at  present  is  exceptional,  and  does  not  represent  the 
general  conditions  which  should  determine  the  principles  of  a 
proposed  law.  It  should  also  be  realized  that  even  in  such  an 
ideal  case  the  employer  will  receive  the  benefit  of  the  improve- 
ment in  conditions  among  his  workers,  which  in  our  opinion 
will  result  from  the  adoption  of  a  plan  of  health  insurance. 
It  is  probably  an  impossible  task  to  apportion  the  cost  pre- 
cisely among  employer,  employee  and  State  according  to  re- 
sponsibility. Other  considerations  will  help  our  decision.  The 
plan  of  insurance  most  likely  in  our  opinion  to  prove  successful 
is  one  in  which  the  carriers  are  local  mutual  associations  man- 
aged by  employers  and  employees  equally.  If  they  are  to  have 
equal  voice  in  the  management  of  these  associations  they  should 
make  equal  contributions  to  the  cost  of  carrying  the  insurance. 

The  proposal  that  the  cost  be  distributed  in  the  proportions 
of  two-fifths  for  the  employer,  two-fifths  for  the  employee  and 
one-fifth  for  the  State  seems  to  us  a  reasonable  one. 


26  SOCIAL  INSURANCE.  [Feb. 

CARRIERS. 

We  have  already  indicated  that  in  our  opinion  the  normal 
carrier  of  insurance  under  any  health  insurance  plan  should  be 
a  local  mutual  association  of  employers  and  employees.  The 
reasons  for  this  conclusion  are  that  such  a  plan  is  more  econom- 
ical in  administration  than  where  the  membership  is  scattered; 
that  it  lends  itself  readily  to  the  proper  organization  of  medical 
treatment  through  contracts  with  local  doctors  or  groups  of  doc- 
tors; that  it  focuses  attention  sharply  on  the  sickness  experi- 
ence of  a  particular  locality;  and  that  it  unites  the  forces 
which  may  most  readily  improve  the  health  conditions  of  that 
particular  locality. 

Provision  should  be  made  for  trade  associations  in  larger  cen- 
ters of  population.  It  would  seem  wise,  also,  to  include  present 
establishment  funds  and  fraternal  and  trade  unions  which  meet 
certain  required  standards  of  insurance,  but  such  organizations 
do  not  possess  the  advantages  of  the  local  or  trade  associations, 
and  their  development  as  insurance  carriers  in  our  opinion 
should  not  be  encouraged  by  the  provision  of  the  act. 

We  think  there  are  sufficient  reasons  for  excluding  private 
stock  companies  operating  for  profit  from  this  field  of  insurance. 
The  element  of  competition,  entailing  many  agents,  increases 
the  cost  substantially.  It  certainly  does  not  seem  just  that  the 
State  should  make  any  contribution  to  a  system  including  this 
increased  cost,  nor  should  it  require  the  employer  to  make  such 
contribution. 

BENEFITS. 

The  benefits  which  any  health  insurance  plan  should  give  are 
of  two  kinds,  —  financial  and  medical.  The  financial  benefit 
should  be  large  enough  to  meet  much  of  the  special  economic 
stress  caused  by  sickness  and  loss  of  wages,  yet  not  large  enough 
to  encourage  malingering.  We  believe  that  two-thirds  the 
amount  of  wages  as  adopted  in  the  bill  printed  in  Appendix  A 
is  reasonable. 

The  medical  benefits  should  include  medical  and  surgical  care, 
nursing,  medicines,  appliances  and  hospital  care  if  necessary. 
Medical  benefits  should  extend  to  members  of  the  worker's 
family.  Any  health  insurance  plan  should  in  our  opinion  in- 


1917.]  HOUSE  —  No.  1850.  27 

elude  a  system  of  maternity  insurance,  with  cash  benefits  pay- 
able to  the  wives  of  employed  men  as  well  as  to  insured  em- 
ployed women.  There  should  also  be  a  small  funeral  benefit  in 
case  of  death. 

MEDICAL  ADMINISTRATION. 

The  most  difficult  questions  which  arise  under  the  act  are 
those  concerning  the  relation  of  the  medical  profession  to  its 
administration.  No  entirely  satisfactory  solution  of  these  prob- 
lems has  been  offered. 

It  is  important,  in  working  out  any  plan  affecting  so  vitally 
and  so  generally  public  health  and  the  conditions  of  medical 
practice,  to  have  the  advice  and  co-operation  of  the  medical 
profession.  It  is  not  likely  that  any  plan  which  makes  the  con- 
ditions of  medical  practice  less  attractive  will  in  the  long  run 
serve  the  public  welfare;  yet  the  advantages  to  be  gained  from 
a  system  of  health  insurance  seem  to  us  so  great  that  every 
attempt  should  be  made  to  secure  a  proper  adaptation  of  medi- 
cal practice  to  it,  though  the  adaptation  may  be  difficult  to 
secure. 

The  fear  that  the  medical  profession  may  be  financially  worse 
off  by  reason  of  a  health  insurance  act  seems  to  us  unfounded. 
All  medical  practice  under  the  act  will  then  be  paid  for,  whereas 
at  present  very  much  is  never  paid  for.  There  is  no  doubt  that 
the  total  amount  of  money  available  for  medical  treatment  will 
be  larger  because  of  the  fact  that  it  is  easier  for  a  wage-earner 
to  make  many  small  payments  than  to  pay  a  single  large  sum, 
and  further,  by  reason  of  the  fact  that  the  State  and  the  em- 
ployer, as  well  as  the  worker,  make  contr  butions. 

In  order  that  the  best  medical  advice  may  be  available  for 
the  solution  of  health  and  medical  administration  problems 
arising  under  the  act,  there  should  be  provision  for  medical  men 
upon  the  Commission  as  administrative  supervisors  of  the  act  or 
as  an  advisory  medical  committee.  We  are  not  satisfied  that 
we  know  just 'how  this  plan  should  be  worked  out,  nor  are  we 
satisfied  that  the  problem  of  the  relation  of  the  Department  of 
Public  Health  to  the  administrative  machinery  has  been  solved. 

There  are,  however,  a  few  principles  which  in  our  opinion 
should  be  observed  in  any  scheme  of  medical  administration. 


28  SOCIAL  INSURANCE.  [Feb. 

First.  —  There  should  be  on  the  part  of  the  insured  a  reason- 
ably free  choice  of  physicians,  and  if  the  insured  desires  to  have 
no  physician  he  should  not  be  compelled  to  accept  one  under 
the  act.  In  so  far  as  he  may  thereby  endanger  the  public 
health  there  is  adequate  law  now  to  meet  the  situation.  If  the 
situation  is  one  which  does  not  endanger  the  public  health,  we 
do  not  believe  there  is  warrant  for  infringing  upon  his  right  of 
personal  liberty  by  compelling  the  insured  to  accept  a  physician 
to  whom  personally  or  to  whose  system  of  medicine  he  has 
great  objection.  The  individual  who  refuses  medical  treatment 
still  receives  financial  benefits  under  the  act  greater  than  his 
own  contributions  would  support,  so  that  he  has  no  excuse  for 
demanding  that  he  be  exempt  entirely  from  the  system. 

Second.  —  All  physicians  of  whatever  school,  licensed  to  prac- 
tice by  law,  should  be  allowed  to  elect  to  practice  under  the  act. 
There  should  be  some  means  of  removing  physicians  from  prac- 
tice under  the  act  for  sufficient  cause. 

Third.  —  Physicians  practicing  under  the  act  should  be  em- 
ployed by  the  carrier.  We  are  not  satisfied  as  to  just  which 
form  of  contract  with  physicians  for  payment  is  best,  or  whether 
any  one  form  of  contract  is  best  in  all  situations.  It  therefore 
seems  to  us  better  not  to  prescribe  the  form  of  contract  in  the 
act,  but  to  leave  carriers  to  make  such  contracts  subject  to  ap- 
proval of  the  commission  administering  the  act. 

Fourth.  —  It  is  evident  that  we  should  not  make  the  mistake 
of  allowing  the  physician  in  attendance  on  the  insured  or  his 
family  to  determine  when  cash  benefits  shall  begin  and  termi- 
nate. He  would  then  be  exposed  to  the  temptation  to  benefit  his 
practice  at  the  expense  of  the  fund.  There  must  therefore  be  in 
addition  to  the  attending  physician,  whose  first  duty  is  to  his 
patient,  a  supervising  physician  employed  by  the  carrier.  The 
function  of  this  supervising  physician  should  be  to  see  that 
proper  treatment  is  given  in  all  cases  by  the  attending  physi- 
cian, and  that  the  fund  does  not  suffer  from  malingering.  In 
case  of  disagreement  as  to  benefits  or  remuneration  there  must 
be  some  adequate  plan  for  decision  and  review  if  necessary. 


1917.]  HOUSE  —  No.  1850.  29 

RELATION  TO  WORKMEN'S  COMPENSATION. 

It  is  essential  to  provide  in  any  health  insurance  law  in  this 
Commonwealth  that  the  present  workmen's  compensation  act 
shall  not  be  confused  by  the  new  system  of  health  insurance. 
The  worker  who  is  incapacitated  by  reason  of  accident  in  indus- 
try should  receive  compensation,  and  if  there  be  doubt  as  to 
whether  his  incapacity  is  due  to  industrial  accident  or  disease, 
the  right  to  apply  for  compensation  should  in  no  way  be  abro- 
gated by  the  health  insurance  law.  If  he  were  incapacitated  by 
disease  which  was  not  purely  the  result  of  industrial  accident  he 
would  receive  medical  care  in  any  event  upon  the  first  day  of 
illness.  Whether  he  would  receive  benefits  under  compensation 
or  under  health  insurance  would  depend  on  the  termination  and 
the  character  of  the  incapacity  and  its  cause.  The  main  point 
is  that  all  the  present  rights  of  the  employee  to  compensation 
should  be  preserved  in  full,  and  not  diminished,  by  the  health 
insurance  system.  The  proposed  law,  printed  in  Appendix  A, 
page  149,  to  this  report,  specifically  so  provides. 

MEDICAL  EXAMINATION  OF  WORKERS. 

Health  insurance  does  not  require  medical  examination  previ- 
ous to  admission  to  insurance.  This  is  one  of  the  advantages  of 
a  compulsory  system.  Nor  does  the  scheme  require  medical 
examination  annually.  In  fact,  it  calls  for  no  medical  examina- 
tion except  by  the  doctor  who  treats  the  insured  person  when 
he  is  sick,  and  by  the  supervising  physician,  who  certifies  that 
he  is  entitled  to  sick  benefit.  The  insured  person  and  his 
family  is  guaranteed  the  right  to  choose  his  physician,  under 
the  proposed  law,  and  cannot  be  required  to  accept  a  doctor 
whom  he  does  not  want. 

Certain  persons  have  objected  to  the  bill  on  the  ground  that 
it  might  result  in  a  requirement  by  employers  of  a  medical 
examination  previous  to  employment,  or  at  periodical  intervals 
after  entering  employment.  Employees  have  feared  that  men 
with  defects  would  be  excluded,  without  provisions  being  made 
for  them,  or  that  minor  physical  defects  would  be  made  an 
excuse  for  discharging  a  man  who  was  objectionable  for  other 
reasons. 


30  SOCIAL  INSURANCE.  [Feb. 

Health  insurance  as  proposed  would  not  prevent  an  employer 
from  doing  what  he  can  do  to-day,  but  he  could  not  enforce  a 
physical  examination  of  his  employees  under  the  health  insur- 
ance system.  He  would  have  to  do  it,  if  at  all,  outside  the  sys- 
tem and  pay  for  it  extra.  The^  proposed  health  insurance  law 
leaves  the  rights  and  powers  of  employer  and  employee  exactly 
where  they  are  to-day.  Labor  would  lose  no  legal  safeguard. 
Furthermore,  as  the  local  and  other  insurance  funds  would  be 
administered  by  boards  on  which  employer  and  employee  have 
equal  representation,  the  practical  effect  of  health  insurance 
would  be  to  bring  about  team-play  rather  than  opposition  in 
caring  for  the  health  of  the  workers  in  industry.  Such  has  cer- 
tainly been  the  result  in  Germany,  as  the  Committee  of  the 
British  Trade  Union  Congress  testified  before  union  labor  in  a 
report  of  1911,  after  a  careful  study  of  the  continental  system. 


COST. 

The  cost  of  a  system  of  compulsory  health  insurance  depends 
on  the  number  of  persons  affected,  the  nature  and  extent  of  the 
benefits  offered,  the  scale  of  wages  which  the  insured  persons 
received,  and  the  cost  of  the  services  and  the  materials  to  be 
provided  in  the  benefit.  Thus  in  a  community  where  wages  are 
low  the  benefit  paid  on  the  basis  of  a  percentage  of  wages  will 
cost  less.  Where  medical  services  are  provided,  and  the  usual 
schedule  of  physician's  fees  are  high,  the  cost  will  be  higher 
than  in  a  community  with  a  lower  average  fee  schedule. 

In  Massachusetts  the  proposed  health  insurance  bill  would 
probably  include  about  a  million  persons.  An  estimate  has  been 
prepared  by  the  Bureau  of  Statistics  of  the  Commonwealth 
showing  that  there  are  about  1,500,000  persons  engaged  in  gain- 
ful occupations.  In  this  estimate  no  deduction  has  been  made 
for  the  classes  of  persons  who  would  be  exempt  from  insurance 
under  the  proposed  law.  These  persons  would  number,  accord- 
ing to  an  estimate  made  by  the  Bureau  of  Statistics,  468,262. 
Assuming  the  conditions  laid  down  in  the  bill  printed  in 
Appendix  A,  there  would  be  about  1,168,959  persons  subject  to 
the  act. 

In  computing  cost  it  is  necessary  to  estimate  separately  a 


1917.]  HOUSE  — No.  1850.  .  31 

considerable  number  of  items,  not  less  than  twelve,  in  order  to 
ascertain  the  cost  of  the  proposed  bill.  Among  these  items  are 
the  following:  cash  benefit  to  the  insured  person  of  two-thirds 
of  the  wage;  hospital  cash  benefits  of  one-half  the  wage  (paid 
to  the  family  of  the  insured  while  he  is  in  a  hospital);  medical 
care  for  the  insured  person;  medical  care  for  his  dependents; 
maternity  cash  benefits;  maternity  medical  care;  hospital  care 
of  insured  persons;  hospital  care  for  dependents;  specialists' 
services;  dental  services;  drugs  and  appliances;  funeral  bene- 
fits; and  administration.  Only  a  thorough  study  of  the  preva- 
lence of  sickness  and  the  cost  elements  involved  in  each  of  these 
benefits  would  give  a  statistical  basis  or  estimate  of  the  cost  of 
health  insurance  in  Massachusetts. 

It  may  be  pointed  out  here  that  it  is  usual  to  compute  the 
cost  of  the  system  on  the  basis  of  a  percentage  of  the  wages  of 
the  insured  persons.  This  is  done  for  the  reason  that  cash  bene- 
fits are  paid  on  the  basis  of  a  percentage  of  wages,  and  the  con- 
tributions also  are  often  calculated  on  a  simi]ar  basis.  No 
other  method  of  expressing  the  cost  gives  as  clear  an  idea  of 
its  relative  importance  in  comparison  with  the  size  of  the 
problem. 

We  have  already  a  good  deal  of  information  bearing  on  the 
question  of  cost.  The  experience  abroad  (statistics  are  avail- 
able for  a  period  of  over  thirty  years  in  Germany,  and  shorter 
periods  in  nine  other  countries)  shows  that  it  can  safely  be  said 
that  the  cost  of  a  health  insurance  system  along  the  same  gen- 
i  eral  lines  now  proposed  in  this  Commonwealth  would  be  be- 
;  tween  2f  and  4^  per  cent,  of  the  wage.  These  are  the  limits 
between  which  the  cost  has  varied  abroad.  It  must  also  be  said 
that  the  upper  limit  is  rarely  reached,  and  only  in  a  few  of  the 
local  funds  in  Germany,  where  the  funds  have  of  their  own  voli- 
tion given  higher  benefits  than  those  required  by  law.  Ordi- 
narily the  cost  runs  from  about  3  to  3j  per  cent,  of  the  pay 
roll. 

There  has  just  been  concluded  the  first  study  of  the  cost  of 
the  health  insurance  system  in  the  United  States,  made  by  the 
[California  Commission  on  Social  Insurance,  with  Dr.  I.  M. 
jRubinow  as  its  consulting  actuary.  As  a  result  of  a  six  months' 
?tudy  on  the  basis  of  benefits  almost  exactly  the  same  as  those 


32  SOCIAL  INSURANCE.  [Feb. 

proposed  in  the  present  bill,  now  before  the  Massachusetts 
Legislature,  Dr.  Rubinow  reached  the  conclusion  that  the  cost  to 
California  would  be  3j  per  cent,  of  wages.  It  must  be  borne  in 
mind  that  in  California  the  average  wage  is  $18,  whereas  in 
Massachusetts  the  average  wage  is  about  $12.50.  The  medical 
fee  schedules  in  California  are  also  about  50  per  cent,  higher  on 
an  average  than  those  prevalent  in  Massachusetts.  Most  of 
these  elements  would  tend  to  increase  cost  there.  The  fact, that 
the  California  study  was  based  on  a  statistical  investigation, 
in  no  way  affected,  of  course,  by  the  experience  abroad,  yet 
with  a  result  so  closely  in  correspondence  with  the  foreign  ex- 
perience, lends  much  weight  to  the  figure  obtained. 

At  a  public  address  in  Boston  on  January  9,  when  Dr.  Rubi- 
now was  questioned  as  to  this  problem  of  cost,  and  the  value  of 
making  an  investigation  in  Massachusetts  similar  to  that  made 
in  California,  he  responded  as  follows:  - 

Investigations  that  elicit  facts  are  always  desirable  if  properly  made; 
but  the  value  of  an  investigation  of  the  cost  of  a  health  insurance  sys- 
tem in  Massachusetts  would  be  to  tell  you  whether  your  cost  would  be 
3T2<r  per  cent,  of  wages,  or  SiV  per  cent,  or  4™  per  cent.  You  may  be 
sure  in  advance  that  your  cost  will  be  between  3  and  4|  per  cent., 
probably  about  3£  per  cent. 

With  this  percentage  of  wages  and  the  figures  as  to  persons 
covered  by  the  proposed  act  quoted  above  from  the  Bureau  of 
Statistics,  as  a  basis,  the  cost  of  a  system  of  health  insurance  in 
Massachusetts  may  be  estimated  at  approximately  $23,000,000. 

This  cost  does  not  mean  the  real  or  net  cost,  as  to  which 
something  should  be  said.  At  the  present  time  the  community 
is  already  bearing  the  cost  of  caring  for  sickness  and  for  the  de- 
pendency resulting  from  sickness.  It  is  also  bearing  the  cost  of 
a  vast  number  of  organizations  supplying  sickness  insurance, 
many  of  them  furnishing  slight  benefits.  The  bill  now  intro- 
duced provides  that  the  distribution  shall  be  40  per  cent,  to  the 
employer,  40  per  cent,  to  the  employee  and,  20  per  cent,  to  the 
Commonwealth.  The  employee  is  now  paying  in  one  way  and 
another  at  least  as  much  as  the  proposed  system  would  cost 
him.  He  is  probably  paying  indirectly  at  least  double  what  the 
the  proposed  system  would  cost  him  in  contributions.  A  man 


1917.]  HOUSE  — No.  1850.  33 

earning  $18  a  week  would  probably  pay  about  If  per  cent,  of 
his  wages,  27  cents  a  week,  as  his  contribution.  It  is  known 
that  the  present  contributions  of  wage  earners  for  ndustrial  in- 
surance (chiefly  burial  insurance)  run  usually  as  high,  and  very 
often  much  higher,  than  this,  even  among  those  of  smallest 
means.  A  study  made  by  Mrs.  Elizabeth  F.  Moloney  of  the 
State  Board  of  Charity,  of  500  families  aided  under  the  act  for 
the  aid  of  mothers  with  dependent  children,  showed  that  the 
average  amount  of  insurance  premiums  paid  by  each  family 
was  54  cents  per  week.  Some  of  these  families  were  carrying 
both  industrial  and  fraternal  insurance. 

Of  the  $12,251,000  paid  for  industrial  insurance  in  Massachu- 
setts in  1915  by  wage  earners,  about  $8,000,000  did  not  come 
back  in  benefits.  While  some  of  this  burial  insurance  is  for 
children,  and  might  be  continued  under  the  proposed  health  in- 
surance, a  considerable  part  of  this  would  be  met  by  the  funeral 
benefit  under  the  proposed  law.  The  wage  earner  is  also  meet- 
ing to-day  the  entire  expense  of  his  medical  treatment,  except 
so  far  as  provided  by  charity,  and  he  is  struggling  along  as  best 
he* and  his  family  can  under  the  burden  brought  by  sickness 
when  his  wages  stop.  From  a  financial  standpoint  the  em- 
ployee will  gain  instead  of  lose,  both  directly  and  indirectly,  by 
the  proposed  system. 

How  about  the  employer?  The  employer  will  gain  in  two 
ways:  first,  he  is  at  the  present  time  meeting  considerable  ex- 
penses for  various  services  to  his  employees  when  they  are  sick; 
paying  the  wages  of  a  valued  employee  for  a  week  while  ill  is 
common  in  the  case  of  regular  employees  who  have  been  in  a 
business  for  a  long  time,  and  many  establishments  also  have  a 
form  of  sick  benefit  to  which  the  employer,  in  some  cases,  con- 
tributes. A  growing  number  of  large  establishments  provide 
\  some  form  of  medical  supervision,  examination,  or,  in  some  in- 
stances, medical  care,  and  some  establishments  have  elaborate 
hospital  and  dispensary  plants  with  salaried  physicians.  The 
cost  of  all  this  would  be  deducted  by  such  employers,  as  it 
would  be  borne  by  the  health  insurance  system.  The  second 
Vay  n  which  the  employer  is  likely  to  gain  is  through  the  in- 
creased efficiency  of  his  employees.  A  considerable  portion  of  sick- 
ness, which  now  causes  loss  of  time  and  requires  the  employer 


34  SOCIAL  INSURANCE.  [Feb. 

to  substitute  a  new  man  and  train  him  temporarily,  would  be 
diminished  by  better  medical  care  and  by  the  absence  of  worry, 
which  is  now  one  of  the  large  contributing  factors  in  diminishing 
the  working  efficiency  of  men  with  families.  Health  insurance 
would  contribute  directly  to  diminishing  broken  time  by  dimin- 
ishing sickness.  It  would  also  contribute  directly  to  efficiency 
by  keeping  the  worker  in  better  trim,  and  would  lessen  the 
shifting  of  workers.  It  has  been  estimated  that  it  costs  on  the 
average  $45  in  manufacturing  industries  to  get  a  new  worker 
and  train  him  to  the  job. 

Of  the  estimated  cost  of  $23,000,000  the  share  of  the  Com- 
monwealth under  the  proposed  plan  would  be  $4,600,000.  But 
there  are  certain  large  items  of  expense  which  the  Common- 
wealth and  cities  and  towns  are  now  bearing  from  which  they 
would  be  relieved  if  a  health  insurance  plan  were  in  operation. 
The  following  estimate  of  such  savings  made  after  a  confer- 
ence with  Mr.  Robert  W.  Kelso,  secretary  of  the  State  Board 
of  Charities,  and  bearing  his  approval  as  on  the  whole  a  reason- 
able estimate,  is  presented.  The  estimate  is  made  by  deducting 
from  present  public  expenses  on  account  of  sickness  the  prbb- 
able  amount  due  to  the  care  of  persons  who  would  be  exempt 
under  the  bill,  and  the  probable  expense  of  chronic  cases 
extending  beyond  the  twenty-six  weeks  allowable  under  the 
bill.  The  items  include  certain  reimbursements  by  the  Com- 
monwealth to  municipalities  on  account  of  the  mother's  aid 
act,  in  so  far  as  that  aid  is  due  to  sickness,  reimbursement  for 
the  care  of  sick  poor  having  a  State  settlement,  reimburse- 
ment for  local  care  of  dangerous  diseases,  part  of  the  expenses 
of  the  State  Infirmary,  part  of  the  maintenance  cost  of  tuber- 
culosis hospitals  borne  by  the  Commonwealth,  and  subsidies  by 
the  Commonwealth  for  the  care  of  tuberculosis  in  municipal- 
ities. The  estimate  of  saving  which  a  health  insurance  bill 
would  make  to  the  Commonwealth  on  account  of  these  items 
is  $850,000. 

Certain  savings  by  municipalities  should  also  be  considered. 
The  statistics  of  33  cities  and  320  towns  of  the  Common- 
wealth show  an  expenditure  of  approximately  $2,600,000  for 
the  following  items:- 


• 

1917.] 


HOUSE  —  No.  1850.  35 


Contagious-disease  hospitals  and  quarantine,      ....  $293,000 

Tuberculosis,. 499,000 

Municipal  hospitals, 989,000 

Subsidies  to  other  hospitals, 29,000 

Health  and  sanitation  in  towns, 865,000 


$2,675,000 

We  submit  that  it  is  a  reasonable  estimate  that  one-half 
>f  this  total,  or  $1,300,000  now  expended  by  cities  and  towns, 
would  be  met  by  insurance  funds  under  the  proposed  act. 
While  this  is  not  a  saving  for  the  State,  it  is  an  important 
public  saving.  Finally,  there  is  an  annual  expenditure  of 
slightly  more  than  $3,000,000  by  the  overseers  of  the  poor  in 
the  Commonwealth  as  a  whole  for  relief  outside  of  institutions. 
A  large  proportion  of  this  relief  is  on  account  of  illness.  Many 
studies  of  charitable  work  make  the  proportion  more  than 
50  per  cent.  It  does  not  therefore  seem  unreasonable  to  esti- 
mate that  $1,000,000  now  expended  for  relief  by  the  overseers 
)f  the  poor  would  be  met  by  insurance  funds  under  the  pro- 
posed law.  * 

/  The  reports  of  the  State  Board  of  Charities  show  that  the 
incorporated  charitable  institutions  of  Massachusetts  expend 
about  $12,000,000  a  year.  About  $4,800,000  come  from  annual 
contributions,  dues  or  entertainments.  Somewhat  more  than 
half  of  the  $12,000,000  goes  to  hospitals,  dispensaries  and 
other  institutions  giving  charitable  medical  care  to  the  sick. 
Of  the  remaining  proportion  of  the  $12,000,000,  a  considerable 
part  is  for  charitable  relief  ol  dependent  persons  who  have 
been  brought  to  require  assistance  because  of  the  sickness  of  a 
wage  earner^  Altogether,  it  is  certain  that  at  least  half  of  the 
total  expenditure  is  for  purposes  of  caring  for  sickness  under 
conditions  w^hich  would  be  met  wholly,  or  in  large  part,  by  the 
proposed  health  insurance.  This  by  no  means  implies  that  the 
proposed  law  would  obviate  the  necessity  for  such  medical 
institutions.  It  would,  however,  render  unnecessary  part  of 
the  contributions  to  them,  and  would  enable  their  resources 
to  be  used  without,  in'  many  instances,  requiring  the  acceptance 
of  charity  on  the  part  of  those  benefiting  by  them;  similarly 
with  those  contributions  for  relief  in  homes  where  relief  has 
been  caused  by  sickness. 


36  SOCIAL  INSURANCE.  [Feb. 

A  very  large  amount  of  money  is  annually  given  privately 
and  without  record  by  individuals  to  aid  persons  who  are  sick 
or  whos.e  families  are  dependent  because  of  sickness.  Almost 
all  of  the  contributions  of  this  kind,  as  well  as  the  contribu- 
tions received  by  the  incorporated  charitable  societies,  come 
from  the  employing  classes.  It  is  not  too  much  to  say  that 
several  millions  of  dollars  now  annually  given  by  these  classes 
would  not  need  to  be  given  for  the  same  purposes  if  the  health 
insurance  law  were  in.  force.  This  would  mean  in  a  measure 
that  the  employing  classes,  who  wou'd  have  to  contribute 
two-fifths  of  the  expense  of  the  proposed  bill,  would  find  relief 
to  a  not  inconsiderable  amount  in  another  direction. 

We  do  not  submit  these  figures  for  the  purpose  of  making 
any  close  estimate  of  the  net  cost  of  a  health  insurance  bill, 
but  rather  for  the  purpose  of  showing  clearly  that  in  consider- 
ing the  gross  estimate,  whether  it  be  $23,000,000  or  some  other 
figure,  we  should  have  in  mind  the  very  substantial  savings  — 
many  millions  certainly  —  which  would  be  made  in  expenses 
now  being  borne  by  employers,  employees  and  the  public. 
We  are  satisfied  that  adequate  medical  treatment  during  ill- 
ness, and  reimbursement  of  a  substantial  portion  of  wages 
lost  on  account  of  illness,  is  worth  all  it  will  cost.  If  the  wage 
earners  of  the  Commonwealth  can  pay  over  $12,000,000  a 
year,  chiefly  for  the  expensive  funerals  which  the  $4,000,000 
returned  to  them  by  industrial  insurance  provides,  even  a 
much  larger  cost  than  $23,000,000  for  the  proposed  plan  of 
health  insurance  would  appear  to  be  justified  if  necessary. 

It  is  well,  also,  not  to  forget  that  a  change  in  the  distribu- 
tion of  the  cost  between  the  employer,  the  employee  and  the 
Commonwealth  might  be  made  so  that  the  contribution  of  the 
Commonwealth  might  be  reduced,  if  it  seemed  better  to  throw 
a  larger  proportion  upon  the  two  industrial  factors  and'  not  to 
increase  so  much  the  State  tax. 

The  benefits  in  the  proposed  health  insurance  law  are  liberal 
in  comparison  with  those  which  are  afforded  abroad,  although 
not  more  liberal  than  those  which  are  afforded  in  some  of  the 
systems  abroad.  It  is  possible  to  reduce  the  cost  substantially 
by  two  methods.  First,  by  limiting  the  number  of  persons 
included  in  the  compulsory  system.  Thus,  for  instance,  agri- 


1917.]  HOUSE  — No.  1850.  37 

cultural  labor  and  domestic  service  might  be  excluded,  and 
systems  abroad  have  often  begun  with  such  exclusions.  Again, 
the  income  limit  to  persons  might  be  altered.  There  might 
be  reductions  made  in  the  charge  of  the  medical  benefits  pro- 
vided, etc.  It  would  not  be  desirable  to  diminish  the  benefits 
to  such  a  point  that  they  would  not  yield  substantial  returns. 
An  experimental  start  should  be  such  as  will  give  a  real  result. 
There  are  a  number  of  other  questions  which  must  be  deter- 
mined before  the  adoption  of  any  system  of  health  insurance. 
Most  of  these  questions  relate  to  details  of  administration, 
some  of  them  very  important  details.  This  commission  in  the 
time  at  its  disposal,  for  the  consideration  of  a  subject  which  is 
as  yet  very  new  to  the  citizens  of  this  Commonwealth,  has  not 
been  able  to  reach  conclusions  as  to  all  matters  of  adminis- 
tration which  it  is  satisfied  will  endure  the  test  of  experience. 

In  general,  the  scheme  of  administration  worked  out  in  the 
bill  printed  in  Appendix  A,  page  149,  seems  likely  to  be  suc- 
cessful. Further  study  and  discussion  will  perhaps  show  the 
necessity  of  modifying  the  plan  in  some  respects.  We  are 
satisfied,  however,  that  some  plan  for  health  insurance  should 
be  adopted  as  an  important  early  step  in  the  interests  of  social 
welfare. 

FRANK  S.  FARNSWORTH. 

ALLISON  G.  CATHERON. 

EDEN  K.  BOWSER. 

HARRY  C.  WOODILL. 


I  find  myself  in  accord  with  my  associate  members  in  their 
recommendations  in  the  foregoing  statement,  with  the  single 
exception  that  I  desire  to  note  here  that,  inasmuch  as  the  cost 
of  the  proposition  of  a  compulsory  system  of  health  insurance 
for  the  Commonwealth  has  been  variously  estimated  at  from 
$4,000,000  to  $27,000,000,  I  feel  I  cannot  join  with  the  other 
members  in  their  recommendations  as  to  the  distribution  of 
the  cost  of  any  such  system  until  more  accurate  information 
is  available  based  on  Massachusetts  statistics* 

HARRY  C.  WOODILL. 


38  SOCIAL  INSURANCE.  [Feb. 


STATEMENT  OF  JOHN  P.  MEADE  AND  EDWARD  G.  MORRIS. 

Universal  health  insurance  aims  to  conserve  the  physical  and 
economic  welfare  of  the  wage  earner,  the  family  and  the  State. 
The  loss  to  the  individual  in  wages  and  efficiency,  because  of 
sickness  and  impaired  health,  is  of  an  appalling  character. 
The  existence  of  poverty  in  the  home  and  effect  of  ill-health 
upon  the  well-being  of  the  working  people  of  the  Common- 
wealth are  well  known.  Sickness  among  the  working  people 
of  Massachusetts  is  the  cause  of  more  dependency  than  indus- 
trial injury  arising  out  of  and  in  the  course  of  their  employ- 
ment. The  family  dependent  upon  the  income  of  the  average 
laborer  is  heavily  burdened  when  sickness  enters  the  home. 
The  economic  loss  resulting  from  interrupted  wage-earning 
capacity  is  a  menace  to  the  proper  development  of  family  life. 
It  is  frequently  manifest  in  the  most  acute  poverty  and  lack 
of  adequate  nourishment  and  care. 

Wage  earners  with  a  small  income  are  unable  to  meet  the 
expense  incidental  to  medical  care  during  long  periods  of  ill- 
ness. Investigations  made  in  this  Commonwealth  have  proven 
that  this  condition  is  true  in  the  case  of  thousands  of  working 
men  who  have  been  treated  in  hospitals  and  dispensaries. 
Because  of  the  inability  of  large  groups  of  wage  earners  to 
secure  at  the  regular  cost  the  medical  attention  needed,  hos- 
pitals and  dispensaries  have  become  numerous  in  the  large 
centers  of  industrial  population  throughout  the  country.  It  is 
said  that  the  number  of  these  institutions  have  increased  seven- 
fold in  the  last  fifteen  years. 

Among  the  wage-earning  section  of  the  population  an  exces- 
sively high  infant  death  rate  exists.  The  investigation  con- 
ducted by  the  Children's  Bureau  of  the  United  States  Depart- 
ment of  Labor  in  Johnstown,  Pa.,  during  1915,  showed  that 
the  infant  mortality  rate  among  those  who  lived  in  the  poorest 
paid  part  of  the  community  was  five  times  greater  than  that 
of  the  more  favorable  sections  of  the  community.  A  similar 
investigation  in  Montclair,  N.  J.,  showed  the  same  result,  - 
an  increased  infant  mortality  rate  with  a  decreased  family 
income.  These  facts  point  strongly  to  the  inability  of  the 


1917.]  HOUSE  —  No.  1850.  39 

poorly  paid   wage   earner  adequately   to   bear  the   burden   of 
sickness  in  the  family. 

That  the  working  people  of  Massachusetts  are  keenly  aware 
of  the  necessity  of  protecting  themselves  against  conditions 
that  undermine  the  stability  of  the  home  is  evidenced  by  the 
fact  that  they  paid  over  $12,000,000  in  premiums  for  industrial 
insurance  during  the  year  1915  in  Massachusets.  What  is 
very  significant  in  connection  with  this  statement  is  the  fact 
that  they  received  but  $4,000,000  in  actual  cash  benefits  in 
return. 

There  is  sufficient  knowledge  available  to  justify  the  opinion 
that  the  attitude  of  the  State  toward  the  problem  should  be 
one  of  careful  inquiry.  The  conservation  of  health  is  essential 
to  its  progress  and  development.  European  Nations  have  made 
this  principle  a  leading  governmental  function.  The  investi- 
gations of  our  Commission  on  the  question  of  health  insurance 
have  convinced  us  that  it  now  constitutes  one  of  the  leading 
world  problems. 

In  our  own  country  it  occupies  a  prominent  place  in  public 
discussion.  During  the  past  year  the  Commission  on  Social 
Insurance  in  California  has  conducted  an  investigation  as  to 
the  need  of  health  insurance  in  that  State,  and  will  report  to 
the  Legislature  during  1917.  The  subject  is  practically  a  new 
one  for  the  United  States.  The  adaptation  of  a  system  of  com- 
pulsory health  insurance  to  the  economic  conditions  in  Mas- 
sachusetts, whose  industries  are  engaged  in  the  keenest  com- 
petition with  other  States  of  the  Union,  makes  our  problem 
entirely  different  from  that  of  the  European  Nations. 

Compulsory  systems  of  health  insurance  provide  for  contribul 
tions  by  employers,  employees  and  the  State.  Such  a  system 
enacted  into  Federal  law  would  place  all  industries  upon  the\ 
same  basis.  The  employers'  contributions  under  such  circum-* 
stances  could  be  made  a  uniform  charge  upon  production,  and 
their  -part  in  the  plan  of  insurance  made  to  spread  over  a  na- 
tional area.  With  compulsory  health  insurance  systems  operat- 
ing in  Massachusetts,  and  excluded  from  the  other  States  of  the 
Union,  a  condition  would  be  created  in  our  industrial  life  which 
would  be  distinctly  harmful  to  some  wage  earners  of  the  Com- 
monwealth. Employers  would  certainly  add  the  cost  of  insur- 


40  SOCIAL  INSURANCE.    •  [Feb. 

ance  contributions  to  the  price  of  their  product.  The  consumer 
would  in  the  final  analysis  pay  this  portion  of  the  expense.  Can 
this  cost  be  passed  to  the  consumer  without  doing  injury  to  the 
wages  of  our  Massachusetts  workmen,  who  are  employed  in  the 
industries  of  this  State  which  are  a  factor  in  Nation-wide 
competition? 

From  the  Bureau  of  Statistics  we  learn  that  400,000  workers 
in  the  manufacturing  industries  of  this  Commonwealth  receive 
an  average  annual  income  from  their  labor  of  $675  each  or  less. 
This  amount  is  not  sufficient  to  maintain  a  family  in  reason- 
able and  frugal  comfort.  The  corner  stone  in  the  economic 
structure  of  the  home  is  a  living  wage.  Conditions  in  industry 
that  would  impair  this  vital  principle  should  be  guarded  against. 
Employers,  who  because  of  their  inability  to  meet  the  compe- 
tition of  other  States  could  not  put  all  the  cost  of  health  insur- 
ance on  the  price  of  their  product,  would  be  very  likely  to 
adopt  a  policy  that  would  have  a  detrimental  effect  upon  wages. 
Some  of  the  leading  employers  of  the  Commonwealth  declare 
this  danger  to  be  a  real  one. 

Under  such  conditions  large  corporations  contributing  vast 
amounts  of  money  to  the  insurance  fund  would  declare  it  diffi- 
cult to  compete  with  the  product  of  other  States  where  no  sys- 
tem of  compulsory  health  insurance  existed.  The  first  to  feel 
the  effect  of  this  change  would  be  the  wage  earner.  The  legiti- 
mate fruit  of  his  toil  and  industry  would  be  jeopardized. 
Especially  is  this  true  in  those  industries  where  no  organized 
effort  can  express  the  point  of  view  of  the  worker.  In  Germany 
the  General  Commission  of  Trade  Unions,  in  a  report  issued  in 
April,  1916,  dealing  with  this  feature  of  compulsory  health  in- 
surance, makes  this  significant  statement :  — 

What  is  to  prevent  the  employers  from  lowering  wages  by  the  amount 
of  the  insurance  premiums  they  have  to  pay  for  their  men?  Only  the 
trade  unions  can  offer  an  effective  resistance  to  this  tendency;  only  the 
organization  of  the  workers  prevents  the  masters  from  casting  the  burden 
of  their  contributions  on  the  shoulders  of  the  workers  themselves. 

It  may  be  said  that  Massachusetts  should  be  a  pioneer  in  the 
work  of  health  insurance,  believing  that,  like  the  experience  in 
workmen's  compensation  laws,  legislation  in  this  direction 


1917.]  HOUSE  —  No.  1850.  41 

would  spread  rapidly  to  other  States,  and  the  competitive 
difficulty  would  soon  disappear.  As  regards  workmen's  com- 
pensation, it  is  known  that  employers  everywhere  were  insuring 
against  the  risks  and  hazards  of  industry  prior  to  the  adoption 
of  this  legislation,  and  the  cost  had  become  a  fixed  charge  upon 
industry. 

The  problem  of  transferring  this  cost  to  the  consumer  was  not 
a  new  problem  in  the  administration  of  the  compensation  laws. 
In  many  States  the  new  legislation  has  made  a  reduction  in  the 
cost  of  accident  insurance  to  the  employer.  New  York,  with  its 
liberal  act,  is  looked  upon  as  a  conspicuous  example  in  this 
respect.  It  is  true  that  some  business  concerns  maintain  certain 
features  of  health  insurance  in  connection  with  the  operation  of 
their  business  in  this  Commonwealth.  It  cannot  be  said  that 
they  are  in  such  proportion  as  to  justify  a  comparison  favorable 
to  compulsory  health  insurance  with  conditions  preceding  the 
adoption  of  the  workmen's  compensation  act.  We  hold  the 
opinion  that  an  effective  system  of  sickness  insurance  can  be 
successfully  established  only  by  Federal  enactment  or  by  an 
agreement  between  the  States  directly  concerned  with  compet- 
itive industries.  Unless  such  legislation  was  operative  in  other 
States,  workmen  leaving  Massachusetts  would  be  compelled  to 
lose  their  equity  in  the  insurance  fund  which  their  earnings 
helped  to  maintain.  Industries  have  their  low  and  high  periods 
of  production  at  different  times  in  the  year.  Fluctuation  in 
employment  is  an  ordinary  condition  in  manufacturing  estab- 
lishments. The  difference  between  the  minimum  and  maximum 
working  force  employed  throughout  the  State  of  Massachusetts 
in  1913  was  over  185,000.  These  conditions  cause  a  substantial 
number  of  workmen  to  accept  employment  and  frequently  es- 
tablish their  residence  in  other  States,  as,  for  instance,  in  New 
Hampshire,  where  the  shoe  industry  is  a  factor,  and  in  Rhode 
Island,  where  the  textile  mills  are  numerous.  Until  the  time 
arrives  when  we  can  safely  consider  an  elaborate  system  of 
sickness  insurance  it  would  seem  that  the  Commonwealth  might 
consider  to  its  advantage  some  extension  of  our  present  system 
of  medical  administration.  Sickness  and  poverty,  to  a  very 
large  degree,  bear  the  relationship  of  cause  and  effect.  In  fami- 
lies where  the  wage  of  the  provider  is  small  sickness  leads  the 


42  SOCIAL  INSURANCE.  [Feb. 

way  to  misery  and  misfortune.  Some  practical  manner  of  treat- 
ing with  cases  where  this  condition  prevails  would  constitute 
work  of  the  most  constructive  type.  One  of  the  most  effective 
features  of  the  sickness  insurance  program  is  the  plan  of  pro- 
viding surgical  and  medical  treatment  to  the  dependents  of  in- 
sured workmen.  To  organize  a  system  that  would  place  medi- 
cal treatment  within  the  reach  of  wage  earners  whose  income  is 
such  that  the  cost  of  adequate  service  is  prohibitive  would  seem 
to  be  productive  of  much  good.  The  need  for  such  service  in 
maternity  cases  is  strongly  apparent  in  the  homes  of  working 
people. 

The  problems  involved  in  the  establishment  of  a  State  sys- 
tem of  health  insurance  should  be  well  thought  out  by  employ- 
ers and  workmen.  There  should  be  some  basis  of  agreement 
reached  by  these  important  factors  in  the  industrial  life  of  the 
Commonwealth  before  legislation  of  this  character  is  adopted. 
The  medical  fraternity  has  officially  requested  the  Commission 
to  refrain  from  proposing  legislation  until  further  study  of  the 
problem  has  been  made  by  the  profession. 

With  the  aim  and  purpose  of  health  insurance  to  conserve  the 
health  of  the  wage  earner  and  his  family  there  can  be  no  differ- 
ence of  opinion.  Until  the  means  by  which  this  end  may  be 
attained  are  thoroughly  understood,  and  public  opinion  is 
formed  on  the  subject,  no  specific  legislation  should  be 
recommended. 

JOHN  P.  MEADE. 

EDWARD  G.  MORRIS. 


1917.1  HOUSE  —  No.  1850.  43 


STATEMENT   OF   WENDELL   P.   THORfi   AND   EDNA  L. 

SPENCER. 

We  do  not  advocate  immediate  legislation  for  health  insur- 
ance because  this  Commission  has  not  had  sufficient  time  to 
study  the  subject  thoroughly.  The  California  commission  has 
spent  several  years  on  the  problem  and  is  still  at  work  upon 
it.  The  need  of  some  kind  of  health  insurance  has  been  amply 
proved,  but  before  a  law  is  enacted  for  such  insurance  the  pub- 
lic and  the  doctors  should  be  given  time  to  inform  themselves 
as  to  the  value  of  it,  so  that  they  may  give  it  their  approval 
and  co-operation.  We  strongly  recommend  further  study  of 
this  system  of  insurance  at  once,  so  that  necessary  details  for 
the  operation  of  such  a  law,  and  especially  those  relating  to 
its  administration,  may  be  determined. 

There  are  two  propositions  for  the  methods  of  conducting 
the  administration  of  such  health  insurance:  should  it  be  of  the 
compulsory  contributory  character,  or  of  the  compulsory  non- 
contributory  type?  In  the  compulsory  contributory  idea  there 
is  the  un-American  feature  of  compelling  our  people  to  enter 
into  a  scheme  with  which  they  may  not  be  in  sympathy.  In 
the  compulsory  non-contributory  feature,  by  which  the  wage 
earner  shall  not  be  compelled  to  contribute,  there  will  probably 
be  opposition  from  the  remaining  two  parties  who  would  be 
asked  to  contribute  to  it,  namely,  the  State  and  the  employer. 
Under  the  compulsory  contributory  scheme,  by  which  the 
State,  the  employer  and  the  employee  must  contribute,  the 
masses  of  our  people,  the  employees  and  wage  earners,  will 
find  objection  for  the  reason  that  by  direct  and  indirect  tax- 
tion  they  would  pay  it  all. 

The  contributory  system  would  place  all  the  burden  upon 
the  workers,  and  it  is  fallacious  to  say  that  there  would  be 
three  distinct  contributions  from  the  government,  the  em- 
ployer and  the  employee.  Let  us  analyze  this  claim  and  see 
who  pays.  If  the  government  pays,  the  people  pay;  if  the 
employer  pays,  he  will  charge  it  to  the  cost  of  his  products, 
such  as  clothing,  shoes  and  other  things,  and  the  people,  who 


44  SOCIAL  INSURANCE.  [Feb. 

buy  the  products,  pay  again.  Now  comes  the  employee,  who 
must  contribute  his  part  according  to  this  scheme,  and  for  the 
third  time  he  pays. 

If  there  is  to  be  a  system  of  health  insurance  established 
we  recommend  either  of  the  following  methods :  — 

1.  The  only  contributors  shall  be  the  State  and  the  employer. 

2.  A  non-contributory  system. 

We  make  these  suggestions  because  we  believe  the  employee 
should  not  be  compelled  to  contribute  to  any  such  system 
of  compulsory  contributory  health  insurance  directly  from  his 
overtaxed  pay  envelope. 

In  the  hearings  held  by  the  Commission,  numbers  of  mem- 
bers of  the  medical  profession,  as  well  as  labor  organizations, 
opposed  the  enactment  of  any  such  proposed  law  at  this  time. 
Labor  organizations  are  also  strongly  opposed  to  the  compul- 
sory contributory  feature. 

With  any  health  insurance  scheme  there  ought  also  to  be  a 
system  of  unemployment  insurance  to  protect  the  insured 
during  long  periods  of  unemployment  from  lapses.  Health 
insurance  and  unemployment  insurance  were  jointly  enacted 
in  England  in  1911. 

The  medical  profession  should  be  given  every  opportunity  to 
study  carefully  all  existing  legislation  of  this  character  which 
so  vitally  affects  them.  It  is  absolutely  necessary  that  they 
be  in  complete  harmony  with  any  proposed  health  insurance 
legislation.  As  for  the  people,  they  should  thoroughly  under- 
stand the  proposition,  and  no  law  which  tends  to  limit  medical 
freedom  should  be  allowed  to  reach  the  statute  books. 

We  recommend,  as  a  beginning  along  the  lines  of  health 
insurance,  that  legislation  be  enacted  from  which  maternity 
benefits  may  be  had,  so  that  any  child  born  in  Massachusetts 
and  its  mother  may  have  the  necessary  protection  and  care 
needed  at  such  vital  times.  Maternity  benefits,  we  believe, 
afford  a  positive  and  interesting  opportunity  for  immeasurable 
good,  and  one  that  cannot  fail  to  advance  the  well-being  of  our 
future  citizens. 

We  therefore  recommend  the  following  proposed  maternity 
bill  for  enactment:  — 


1917.1  HOUSE  — No.  1850.  45 


AN  ACT  TO  PROTECT  MOTHERS  AND  CHILDREN  DURING  THE  MATERNITY 
PERIOD  IN  THE  COMMONWEALTH  BY  RIGHT  OF  CITIZENSHIP,  THROUGH 
THE  ESTABLISHMENT  OF  A  MATERNITY  BOARD. 

Be  it  enacted,  etc.,  as  follows: 

SECTION  1.  From  and  after  the  second  day  of  January,  nineteen 
hundred  and  eighteen,  there  shall  be  established  a  board  for  the  admin- 
istration of  maternity  benefits.  Said  board  shall  be  appointed  by  the 
governor  and  shall  consist  of  three  members  to  serve  without  pay,  all  of 
whom  shall  be  women,  and  one  of  whom  shall  be  designated  by  the  gov- 
ernor to  serve  as  chairman.  One  member  must  be  a  representative  of 
labor,  one  a  physician  experienced  in  obstetrical  work,  and  preferably  one 
who  has  practised  among  those  who  would  be  eligible  to  receive  maternity 
benefits  under  this  act,  and  one  a  recognized  student  of  economics.  One 
member  shall  be  appointed  for  three  years,  one  for  four  years,  and  on3  for 
five  years.  However,  at  the  expiration  of  the  time  for  which  the  first 
two  members  are  appointed  the  governor  shall  appoint  said  members  for 
the  term  of  five  years  respectively. 

SECTION  2.  Not  later  than  one  month  previous  to  the  date  for  all  ap- 
pointments the  governor  shall  hold  a  public  hearing  duly  advertised,  rela- 
tive to  said  appointments,  at  which  he  shall  preside,  and  where  discussion 
of  names  of  those  eligible  for  such  appointments  may  be  heard.  The 
governor  shall  fill  all  expiring  terms  of  office  on  said  commission  not  later 
than  one  month  after  said  term  shall  expire. 

SECTION  3.  Said  board  shall  have  an  office  in  the  state  house,  and  shall 
receive  such  money  for  general  office  expenses,  clerical,  travel  and  other- 
wise as  shall  be  annually  appropriated  by  the  general  court. 

SECTION  4.  Any  woman  shall  be  deemed  eligible  under  this  act,  who  is 
about  to  become  a  mother  or  who  has  become  a  mother  within  two  months, 
and  whose  income  from  whatever  source  is  ten  dollars  a  week  or  less,  or 
whose  husband  is  receiving  ten  dollars  a  week  or  less,  or  if  the  combined 
income  of  both  husband  and  wife  is  ten  dollars  a  week  or  less,  and  all  other 
women  whom  it  shall  be  determined,  as  hereinafter  stated,  are  unable  to 
provide  the  ordinary  and  proper  care  for  themselves  and  infant  during  a 
period  before  and  after  childbirth.  Any  woman  to  be  eligible  under 
this  act  must  have  been  a  resident  of  the  state  for  two  consecutive 
years  next  previous  to  application  for  maternity  benefits. 

SECTION  5.  In  case  of  wage  workers,  or  the  wives  of  wage  workers, 
where  satisfactory  proof  shall  be  offered  that  the  wage  of  neither,  nor  the 
combined  wage,  or  other  income  of  both,  is  in  excess  of  ten  dollars  a  week, 
benefit  shall  be  granted  without  further  investigation. 

SECTION  6.  An  applicant  for  maternity  benefits  must  apply,  either 
through  a  clergyman  or  physician,  to  the  mayor  of  the  city  or  chairman 
of  the  board  of  selectmen  of  the  town  of  which  she  is  a  resident.  Such 


46  SOCIAL  INSURANCE.  [Feb. 

application  shall  be  investigated  and  passed  on  by  a  city  clerk  or  clerk 
of  the  board  of  selectmen.  No  employee  or  official  of  any  private  chari- 
table organization  or  poor  relief  department  of  a  town  or  a  city,  or  of  the 
state  board  of  charity,  shall  be  used  as  an  investigator  to  secure  informa- 
tion relative  to  requests  for  maternity  benefits.  All  applications  shall  be 
forwarded  with  recommendations  to  the  board  of  administration  of  mater- 
nity benefits,  whose  recommendation  shall  be  final,  but  any  applicant  who 
is  denied  maternity  benefits  shall  be  entitled  to  a  hearing  before  the  board, 
said  hearing  to  be  open  if  the  applicant  so  desires.  The  financial  necessity 
of  the  applicant  shall  be  the  only  proposition  upon  which  the  board's 
decision  shall  be  rendered. 

SECTION  7.  It  shall  be  unlawful  to  disclose  the  identity  of  a  recipient 
of  maternity  benefits  under  this  act,  or  to  publish  the  proceed  ngs  in  any 
such  case  unless  the  consent  of  the  recipient  is  obtained,  or  unless  such 
recipient  shall  have  caused  public  statements  to  be  issued  relative  to  same. 
Violation  of  any  provision  of  this  section  shall  be  punished  by  a  fine  of 
not  less  than  thirty  nor  more  than  fifty  dollars  for  each  offence. 

SECTION  8.  Maternity  benefits  may  continue  for  a  period  of  six  weeks, 
and  as  much  longer  as  shall,  in  the  judgment  of  the  board,  be  deemed  neces- 
sary. Women  eligible  to  maternity  benefits  under  this  act  shall  receive 
either  hospital  care  or  home  nursing,  or  both;  medicine  and  medical  care; 
and  such  other  obstetrical  care  as  may  be  necessary,  and  a  sum  of  money 
not  less  than  ten  dollars  a  month  nor  more  than  fifty  dollars. 

SECTION  9.  Such  cases  shall  not  be  given  to  a  city  physician,  unless  by 
request  of  the  patient,  who  shall  be  allowed  in  all  cases  to  choose  her  own 
physician.  The  attending  physician  shall  be  paid  at  a  rate,  in  so  far  as  is 
feasible,  commensurate  with  his  or  her  usual  fee  for  such  cases. 

SECTION  10.  No  charitable  organization  shall  furnish  nurses  under 
this  act. 

SECTION  11.  No  woman  receiving  maternity  benefits  under  this  act 
shall  be  deemed  a  pauper  or  recipient  of  charity. 

SECTION  12.  The  commonwealth  shall  appropriate  the  sum  of  twenty- 
five  thousand  dollars  for  all  benefits  provided  for  under  this  act,  and  the 
maternity  board  shall  make  such  regulations  and  prescribe  such  oaths  as 
it  shall  deem  necessary  to  protect  the  commonwealth  in  the  payment  of 
such  benefits. 

SECTION  13.  Upon  the  passage  of  this  act  permission  shall  be  requested 
from  the  federal  government  to  post  copies  of  it  in  every  post  office  in  the 
commonwealth,  and  in  addition,  an  outline  of  this  act  with  a  statement  of 
the  requirements  for  eligibility  shall  be  published  once  each  month  in  the 
leading  papers  of  the  state. 

SECTION  14.  This  act  shall  be  liberally  construed  to  carry  out  its  pur- 
pose, namely,  as  an  exercise  of  the  police  power  of  the  state  to  preserve  the 
health  of  the  citizens,  and  forever  to  prevent  the  placing  of  the  stigma 
of  pauperism  upon  the  holy  state  of  motherhood. 


1917.]  HOUSE  —  No.  1850.  47 

An  extension  of  our  present  methods  of  dealing  with  sick- 
ness in  all  its  details  should,  we  believe,  first  be  taken  up  and 
thoroughly  dealt  with  before  the  enactment  of  any  complicated 
general  health  insurance  law.  Many  physicians  in  the  hearings 
before  the  Commission  expressed  the  belief  that  the  present 
methods  of  prevention  and  help  should  be  extended  to  the 
utmost  before  any  health  insurance  system  is  inaugurated. 
Some  felt  that  if  necessary  funds  could  be  obtained  to  do 
this  work  properly  health  insurance  would  be  found  to  be  un- 
necessary. 

In  European  countries  there  is  much  discussion  as  to  the 
value  of  health  insurance.  The  results  of  its  work  in  such 
places  have  not  been  entirely  satisfactory,  but  this  should  not 
be  construed  to  mean  that  some  health  insurance  protection 
of  the  European  type  cannot  be  Americanized  sufficiently  to 
warrant  its  adoption  here. 

We  are  heartily  in  favor  of  any  equitable  system  that  will 
minimize  the  costly  hazards  of  sickness  which  destroy  the 
happiness  of  our  people,  but  we  are  not  unmindful  of  the 
great  expenses  and  the  difficulties  involved  in  the  making  and 
the  working  of  such  a  protective  law,  and  therefore  believe 
that  this  question  should  be  given  much  more  consideration 
before  the  final  steps  are  taken  than  we  have  been  able  to 
give  it  during  our  limited  time. 

A  special  commission  should  spend  at  least  a  year  upon 
this  problem.  Unfortunately,  the  conditions  in  such  countries 
as  England  and  Germany  do  not  allow  a  very  close  study  of 
the  workings  of  this  insurance  legislation  under  normal  con- 
ditions. We  know,  however,  that  the  British  Parliament  has 
within  the  last  year  been  considering  changing  the  financial 
arrangements  in  relation  to  women  insured  under  the  act.  If 
we  could  wait  until  the  cessation  of  hostilities  we  would  be 
able  to  get  the  benefit  of  the  English  experience  with  health 
insurance. 

The  extension  of  the  workmen's  compensation  act  to  cover 
the  hazards  of  sickness  and  the  prevention  of  it  should  be 
considered  in  connection  with  the  further  study  of  the  health 
insurance  problem,  so  as  to  ascertain  if  an  extension  of  this 


48  SOCIAL  INSURANCE.  [Feb. 

system,  properly  changed  and  adapted,  would  not,  to  a  large 
degree,  take  the  place  of  health  insurance. 

No  problem  that  has  ever  been  placed  before  the  people  of 
Massachusetts  deals  so  intimately  with  the  lives  of  such  a 
large  number  of  our  people.  The  very  complexity  of  it,  as 
well  as  its  tendency  to  alter  the  close  relation  between  the 
medical  profession  and  the  people,  demands  that  we  deal  with 
it  with  caution  and  care. 

WENDELL  PHILLIPS  THORE. 
EDNA  LAWRENCE  SPENCER. 


1917.]  HOUSE  —  No.  1850.  49 


REPORTS  ON   OLD-AGE  PENSIONS. 


INTRODUCTION. 

Old-age  pensions  have  been  the  subject  of  investigation  three 
times  previous  to  the  appointment  of  this  Commission.  The 
first  investigation  of  which  we  have  record  was  authorized  by 
the  Resolves  of  1907  in  accordance  with  which  a  commission  of 
five  persons  to  consider  the  subject  of  "  old  age  insurance,  or  old 
age  pensions,  or  annuities,"  was  appointed  by  the  Governor  and 
required  to  report  in  January,  1909.  The  time  within  which  the 
commission  was  ordered  to  report  was  later  extended  by  a 
resolve  of  1909,  and  with  a  substantial  added  appropriation. 
The  commission  continued  its  investigation  and  reported  to  the 
General  Court  in  1910,  its  findings  and  conclusions  being  pub- 
lished as  House  Document  No.  1400  of  that  year.  A  majority 
of  the  commission  went  on  record  as  opposed  to  the  establish- 
ment of  any  general  non-contributory  system  of  old-age  pen- 
sions in  Massachusetts. 

The  second  investigation  of  this  subject  authorized  by  the 
Commonwealth  was  made  by  a  commission  authorized  by  chap- 
ter 106  of  the  Resolves  of  1913.  The  commission  consisted  of 
three  persons  who  were  appointed  by  the  Governor,  consisting 
of  James  E.  McConnell,  chairman,  Magnus  W.  Alexander  and 
Henry  S.  Dennison. 

Under  the  terms  creating  the  commission  it  was  required  to 
make  its  report  on  or  before  Jan.  10,  1914.  The  commission 
found,  however,  that  it  would  be  impossible  to  report  within 
the  specified  time  limit,  the  Legislature  subsequently  extended 
the  time  until  March  16  of  that  year,  and  the  report  was 
made  as  of  that  date.  The  findings  and  conclusions  of  the 
commission  are  to  be  found  in  House  Document  No.  2400  of 
1914.  This  commission  also  reported  that  from  the  evidence  it 
had  been  able  to  gather  there  was  no  ground  upon  which  to 


50  SOCIAL  INSURANCE.  [Feb. 

recommend  definite  legislation  on  the  subject  of  old-age  pen- 
sions. The  commission  recommended  a  more  thorough  and  far- 
reaching  investigation  of  old-age  dependency,  and  the  necessity 
for  this  sort  of  aid,  and  further  recommended  that  the  investiga- 
tion be  undertaken  in  connection  with  the  next  regular  decen- 
nial census  of  the  Commonwealth.  The  commission  suggested 
that  legislation  in  the  Commonwealth  on  the  subject  might  be- 
come necessary  at  some  future  time,  but  did  not  feel  itself 
justified  in  suggesting  or  submitting  any  definite  legislation  on 
the  subject  at  that  time. 

The  third  study  and  investigation  of  the  subject  of  old-age 
pensions  was  made  as  a  result  of  the  suggestion  of  the  1913 
commission,  and  was  authorized  by  the  General  Court  of  1914 
by  a  resolve  directing  the  Bureau  of  Statistics  to  conduct  an 
inquiry  in  connection  with  the  taking  of  the  decennial  census 
in  order  to  determine  the  extent  of  age  dependency  in  Massa- 
chusetts. 

Further  reference  is  made  to  this  report  later  on.  In  this  con- 
nection it  is  interesting  to  note  that  the  Commonwealth  has  ex- 
pended approximately  $50,000  during  the  last  nine  years  in 
studying  and  investigating  the  need  and  advisability  of  a  sys- 
tem of  pensions  for  its  aged  citizens. 

The  commission  of  1909  published  in  connection  with  its  re- 
port a  descriptive  account  of  all  the  then  existing  systems  of  age 
pensions.  These  data  have  been  further  amplified  and  brought 
up  to  date  by  the  Bureau  of  Statistics  in  connection  with  its 
study  just  completed,  and,  through  the  courtesy  of  the  director 
of  the  Bureau,  the  Commission  is  printing  in  its  Appendix  a 
descriptive  account  of  national  old-age  pensions.  The  Bureau 
of  Statistics  has  been  at  considerable  pains  and  expense  in  col- 
lecting the  information  contained  in  the  Appendix  above  men- 
tioned, and  the  Commission  regards  it  a  most  excellent  and 
valuable  summary  of  this  class  of  insurance. 

In  its  investigation  of  the  subject  of  age  pensions  the  Com- 
mission found  in  the  report  which  has  just  been  published  by 
the  Bureau  of  Statistics,  entitled  "Report  of  a  Special  Inquiry 
relative  to  Aged  and  Dependent  Persons  in  Massachusetts," 
practically  all  the  information  necessary  for  its  use.  This  in- 
vestigation and  report  was  made  pursuant  of  a  resolve  passed 


1917.]  HOUSE  — No.  1850. 

in  1914,  directing  the  Bureau  to  conduct  an  investigation  in  the 
State  in  connection  with  the  taking  of  the  decennial  census  in 
the  year  1915,  to  determine  the  number  of  persons  over  sixty- 
five  years  of  age  in  the  cities  and  towns  of  the  Commonwealth, 
their  length  of  residence  in  the  State,  the  number  of  dependent 
persons  of  all  ages  being  supported  in  the  various  public  and 
private  institutions  within  the  State,  the  number  of  persons 
receiving  aid  from  any  public  or  private  source  and  the  cost  of 
such  aid. 

Through  the  courtesy  of  the  director  of  the  Bureau  of  Sta- 
tistics such  data  as  had  already  been  gathered  in  connection 
with  its  investigation  on  the  subject  of  aged  indigency  were  at 
once  made  available  to  the  Commission  on  its  organization. 

While  reference  is  made  in  various  parts  of  the  Commission's 
report  to  data  contained  in  the  report  of  the  Bureau  of  Sta- 
tistics, the  Commission  at  this  time  respectfully  commends  to 
the  attention  of  the  members  of  the  General  Court  this  docu- 
ment, wrhich  merits  their  careful  study.  It  is  doubtful  if  any 
State  has  ever  conducted  so  thorough  and  far-reaching  an 
investigation,  or  gathered  and  compiled  such  an  amount  of  in- 
formation on  the  subject  of  age  dependency  as  is  contained 
in  this  excellent  report. 

A  majority  of  the  Commission  are  in  accord  in  recommending 
the  principle  of  non-contributory  age  pensions.  Those  members 
of  the  Commission,  constituting  a  majority,  who  recommend 
the  principle  of  old-age  pensions  are  also  in  partial  agreement 
as  to  the  taxation  of  intangible  property  in  the  Commonwealth 
as  the  best  means  of  providing  the  necessary  revenue  for  the 
payment  of  the  pensions.  Some  of  the  majority,  however, 
regard  it  as  the  part  of  wisdom  to  await  the  results  of  the  new 
income  tax  recently  enacted  in  the  Commonwealth  and  de- 
signed to  uncover  much  of  the  so-called  "hidden  wealth"  in 
the  State.  In  the  event  of  this  new  form  of  taxation  revealing 
any  such  appreciable  amount  of  intangible  property  as  has 
at  different  times  been  estimated  to  exist,  they  believe  it 
might  then  well  be  made  to  form  the  chief  means  of  supporting 
a  system  of  non-contributory  age  pensions.  The  other  mem- 
bers of  the  majority  recommend  the  passage  of  immediate 
legislation  establishing  a  State  system  of  old-age  pensions,  and 


52  SOCIAL  INSURANCE.  [Feb. 

suggest  that  the  income  from  the  intangible  wealth  in  the  State 
should  bear  the  burden  of  these  pensions.  Should  the  present 
income  tax  law  prove  inadequate  in  bringing  to  light  enough 
property  to  yield  a  sufficient  revenue  for  the  payment  of  these 
pensions,  these  members,  forming  the  major  part  of  the  major- 
ity members,  suggest  that  it  be  left  to  the  General  Court  to 
devise  means  of  reaching  this  source  of  wealth,  which  in  their 
opinion  forms  such  a  large  part  of  the  wealth  of  the  State. 

Certain  members  of  the  Commission,  as  will  be  noted  from 
one  of  the  minority  reports  herewith,  do  not  regard  this  as 
the  proper  time  for  putting  into  operation  in  the  Common- 
wealth any  State  system  of  old-age  pensions.  While  these 
members  are  of  the  opinion  that  as  between  the  two  systems 
the  contributory  has  more  merit  than  the  non-contributory, 
they  consider  that  the  Commission's  study  shows  neither  the 
need  nor  the  demand  to  warrant  the  establishment  of  any  age 
pension  system  at  the  present  time.  The  majority  reports  as 
well  as  the  dissenting  reports  are  herewith  subjoined. 


1917.]  HOUSE  —  No.  1850.  53 


STATEMENT  OF  WENDELL  P.  THORfi,  EDNA  L.  SPENCER 
AND  EDWARD  G.  MORRIS,  RELATIVE  TO  NON-CON- 
TRIBUTORY OLD-AGE  PENSIONS. 

We  approach  this  subject  of  old-age  pensions  with  solemn 
thought.  We  have  felt  the  intense  responsibility  that  must 
come  to  any  one  concerned  in  a  report  on  a  subject  which 
touches  so  intimately  the  lives  of  such  a  vast  number  of  our 
people  and  which  means  so  much  to  their  general  welfare  and 
happiness.  We  have  been  aware  that  the  greater  number  of 
our  citizens  are  in  accord  with  our  desire  that  a  so-called  non- 
contributory  old-age  pensions  law  be  enacted  to  fill  a  very  vital 
and  necessary  need  —  a  humanitarian  service.  We  realize,  in 
advocating  this  measure,  that  the  first  test  of  a  State's  or 
Nation's  greatness  is  in  the  care  it  takes  of  the  people  who 
inhabit  it. 

After  studying  the  problem  of  "protecting  wage  earners  from 
the  burdens  of  old  age,"  we  have  concluded  that  it  is  a  very 
different  problem  from  other  social  welfare  measures,  in  that 
there  can  be  no  recapitalization  of  energy  and  strength  in  the 
aged  citizen.  When  old  age  comes  to  those  without  sufficient 
means,  prospects  of  employment  and  health  and  other  oppor- 
tunities are  passed,  or  quickly  passing,  all  lessening  the  pos- 
sibility of  their  providing  for  themselves,  and  we  have  them  to 
treat  humanely,  with  love  and  respect,  or  to  throw  deliberately 
on  the  scrap-heap,  like  human  junk,  to  be  neglected  till  death 
brings  them  peace. 

Therefore  we  are  convinced  that  the  Commonwealth  should 
establish  at  once  a  system  of  non-contributory  old-age  pensions 
to  protect  our  deserving  aged  citizens,  both  men  and  women, 
who  are  without  sufficient  means  and  unable  properly  to  provide 
for  themselves.  We  have  reached  this  conclusion  from  the 
evidence  given  at  our  hearings  and  from  the  knowledge  of  the 
continuously  increasing  and  intense  demand  for  such  pensions 
prolonged  over  a  period  of  years  in  Massachusetts. 

We  hold  that  the  so-called  non-contributory  system  of  pen- 
sions is  the  most  humane  and  equitable;  that  such  protection 
is^an  inalienable  right  of  good  citizenship;  and  that  a  Christian 
State  or  Nation,  dedicated  to  the  welfare  of  its  people,  cannot 


54  SOCIAL  INSURANCE.  [Feb. 

with  honor  continue  to  degrade  its  worthy  aged  people  through 
pauperism  after  they  have  given  of  their  strength  and  vigor  to 
create  its  wealth,  its  greatness  and  its  glory. 

The  result  of  our  examination  of  the  question  of  the  causes 
of  poverty  in  old  age  among  our  people  does  not  agree  with  the 
opinions  of  those  who  maintain  that  we  are  an  unthrifty  people, 
and  therefore  fail  to  provide  for  ourselves  through  life. 

We  find  that  greed  in  industry  is  the  principal  factor,  —  the 
greed  which  does  not  permit  a  living  wage;  that  greed  in 
industry  penalizes  the  industrial  army  in  all  its  ramifications, 
making  a  disastrous  condition  of  need  through  the  lives  of  the 
workers,  thus  keeping  them  in  a  condition  of  prolonged  poverty. 
We  are  positive  that  greed  in  industry  demands  inhumanely, 
like  Moloch,  large  profits  for  the  few  from  the  backs  of  the 
many;  that  greed  in  industry,  which  creates  the  underpaid 
toiler,  is  unholy,  is  the  great  industrial  disturber,  the  funda- 
mental evil  which  brings  the  demoralizing  hardships  that  sap 
the  vitality  and  destroy  the  physical  and  moral  well-being  of 
the  workers.  Its  baneful  influences  enter  the  homes,  reduce 
industrial  efficiency,  and  make  the  continuous  and  ultimate 
costs  in  the  lives  of  the  toilers  such  that  it  is  impossible  for 
them  to  save  little,  if  anything,  for  times  of  need  and  for  the 
later  years  of  life. 

So  long  as  this  unfair,  inimical  and  calamitous  system  of 
dividing  the  profits  of  labor  continues  slowly  and  painfully  to 
drag  the  wage  earner  into  and  along  the  path  of  poverty  to  old 
age,  just  so  long  must  there  be  a  justifiable  demand  for  non- 
contributory  old-age  pensions  to  be  provided  as  a  right  of 
citizenship  under  the  collective  action  of  the  Commonwealth  to 
protect  such  victims.  The  justice  of  this  demand  no  citizens 
can  honorably  deny. 

No  better  or  more  fitting  reasons  can  be  given  for  the  estab- 
lishment by  this  Commonwealth  of  so-called  non-contributory 
old-age  pensions  than  these,  which  were  given  by  Lloyd  George 
when  Chancellor  of  the  Exchequer  in  his  advocacy  of  the 
measure  in  the  British  Commons  in  1908:  - 

The  first  general  criticism  is  that  this  is  a  non-contributory  scheme. 
...  I  demur  altogether  to  the  division  of  the  scheme  into  contributory 
and  non-contributory.  So  long  as  you  have  taxes  imposed  upon  commod- 


1917.]  HOUSE  — No.  1850.  55 

ities  which  are  consumed  practically  by  every  family  in  the  country,  there 
is  no  such  thing  as  a  non-contributory  scheme.  You  tax  tea  and  coffee, 
sugar,  beer  and  tobacco,  and  you  get  a  contribution  from  practically  every 
family  in  the  land  one  way  or  another.  So,  therefore,  when  a  scheme  is 
financed  out  of  public  funds,  it  is  as  much  a  contributory  scheme  as  9. 
scheme  which  is  financed  directly  by  means  of  contributions  arranged  on 
the  German  or  any  other  basis.  A  workman  who  has  contributed  health 
and  strength,  vigor  and  skill,  to  the  creation  of  the  wealth  by  which  taxa- 
tion is  borne,  has  made  his  contribution  already  to  the  fund  which  is  to 
give  him  a  pension  when  he  is  no  longer  fit  to  create  that  wealth.  There- 
fore I  object  altogether  to  the  general  division  of  these  schemes  into  con- 
tributory and  non-contributory  schemes. 

There  is,  however,  a  class  of  scheme  which  is  known  as  the  contributory. 
There  is  the  German  scheme,  in  which  the  workmen  pay  into  a  fund.  It  is 
rather  a  remarkable  fact  that  most  social  reformers  who  have  taken  up 
this  question  have  at  first  favored  contributory  schemes,  but  a  closer 
examination  has  almost  invariably  led  them  to  abandon  them  on  the 
ground  that  they  are  unequal  in  the  treatment  of  the  working  class, 
cumbersome  and  very  expensive,  and  in  a  country  like  ours  hopelessly 
impracticable.  .  .  '.  Let  me  give  you  now  two  or  three  considerations 
why,  in  my  judgment,  a  contributory  scheme  is  impossible  in  this  country. 
In  the  first  place,  it  would  practically  exclude  women  from  its  benefits. 
.  .  .  Another  consideration  is  that  the  majority  of  the  workingmen  are 
unable  to  deflect  from  their  weekly  earnings  a  sufficient  sum  of  money  to 
make  adequate  provisions  for  old  age,  in  addition  to  that  which  they  are 
now  making,  for  sickness,  infirmity  and  unemployment. 

We  subscribe  to  these  statements,  for  we  believe  that  every 
statement  made  by  Lloyd  George  herein  is  applicable  to  the 
conditions  and  touch  the  same  principles  as  those  with  which 
we  are  concerned  in  relation  to  our  own  people. 

The  term  non-contributory  is  used  in  this  report  mainly  as  a 
centra-distinction  between  it  and  the  term  contributory.  We 
all  know  that,  directly  and  indirectly,  not  a  single  person 
escapes  payment  for  any  government  expenses,  and  we  are 
positive  that  the  so-called  non-contributory  system  is  not  a 
system  that  "robs  from  the  rich  to  give  to  the  poor." 

It  is  said  that  there  is  no  difference  between  non-contributory 
old-age  pensions  and  poor-relief.  It  is  claimed  by  those  who 
are  willing  to  remake  language  to  suit  their  own  purpose  that 
poor-relief  called  pensions  does  not  alter  the  fact  that  it  is 
poor-relief;  but,  if  we  accept  the  word  pensions  with  its  under- 
stood meaning,  it  is  a  periodic  allowance  to  an  individual  in 


56  SOCIAL  INSURANCE.  [Feb. 

recognition  of  meritorious  work  or  service.  We  claim  that  the 
industrial  army  and  the  mothers  in  the  homes  render  such  work 
and  service  to  the  State,  and  that  such  pensions  are  not  de- 
grading and  pauperizing,  but  come  as  rewards  of  merit.  Poor- 
relief,  in  its  understood  meaning,  is  a  particular  kind  of  pauper- 
ization, a  gratuity  and  a  pauper's  dole,  given,  not  as  a 
particular  recognition  of  merit  or  of  services  rendered,  but  as 
charity.  We  maintain,  as  they  did  in  Great  Britain,  that  there 
is  a  complete  distinction  between  non-contributory  old-age 
pensions  and  poor-relief. 

It  will  be  argued  by  some  that  because  numbers  of  needy 
aged  people  did  not  appear  before  the  Commission  in  support 
of  pensions  there  is  no  real  concerted  demand  from  them  for  it. 
We  disagree  with  this  deduction,  and  hold  that  lack  of  means, 
inability  to  be  present,  no  knowledge  of  the  hearings,  and  just 
pride  m/  refusing  to  disclose  publicly  their  need  until  pensions 
are  to  be  granted  are  some  of  the  actual  reasons  why  we  did 
not  hear  from  more  of  the  needy  aged.  A  similar  seeming 
attitude  on  the  part  of  the  English  people  was  also  noticeable 
previous  to  the  enactment  of  their  old-age  pension  law.  Common 
knowledge  compells  us  to  believe  there  are  numbers  of  such 
people  who  would  gladly  welcome  old-age  pensions  here  in 
Massachusetts. 

Others  hold  that  only  those  who  will  require  pensions  imme- 
diately are  interested  in  the  coming  of  such  a  law,  but  we  know 
from  experience  that  thousands  of  citizens  below  the  pension- 
able age  want  pensions  for  those  who  need  them  now  and  as  a 
safeguard  for  themselves  in  the  coming  years. 

Appealing  for  this  protection  because  of  the  known  impos- 
sibility of  their  people  to  provide  for  themselves  in  old  age 
were  members  of  labor  unions  representing  thousands  of  workers 
who  made  vigorous  appeal  for  the  establishment  of  a  system  of 
non-contributory  old-age  pensions.  To  this  appeal  at  our 
hearings  was  also  added  the  favorable  support  of  men  and 
women  in  various  walks  of  life,  while  the  opposition  to  the 
non-contributory  system  was  a  negligible  factor. 

Added  to  this  demand  for  non-contributory  old-age  pensions 
was  the  overwhelming  vote  recorded  at  the  last  two  State 
elections  in  favor  of  this  measure  through  the  medium  of  a 
referendum  question  which  read  as  follows :  — 


1917.1 


HOUSE  — No.  1850. 


57 


Shall  the  representative  from  this  district  be  instructed  to  vote  for  non- 
contributory  old-age  pensions,  so  as  to  have  the  Commonwealth  pension 
its  deserving  needy  aged  citizens,  women  and  men,  over  sixty-five  years  of 
age  and  residents  of  the  Commonwealth  for  at  least  fifteen  years? 

In  1915  the  vote  upon  this  question  in  the  cities  and  towns 
where  it  appeared  upon  the  ballot  was :  — 


Yes. 

No. 

Brockton,     ........... 

7,215 

1,341 

8,697 

2,718 

Lawrence,    .         

Methuen 

5,082 
1  035 

1,303 
308 

Abington 

671 

185 

Whitman 

978 

216 

In  1916  the  vote  was:  — 


Yes. 

No. 

Boston  (Wards  9,  10  and  11)  

6,147 

1,076 

New  Bedford  (Eighth  Bristol  District),     

3,561 

1,140 

We  are  aware  of  criticisms  that  will  be  made  against  such 
referenda,  but  this  one  was  not  vague  and  misleading,  as  many 
are;  it  was  easily  understood  by  the  people.  They  knew  from 
their  experience  the  need  of  old-age  pensions,  and  voted  accord- 
ingly, regardless  of  the  opposition,  for  they  had  seen  relatives 
and  friends  suffering  in  their  last  years  for  the  want  of  such 
pensions. 

At  its  convention  in  New  Bedford  in  1915  the  Massachusetts 
State  Branch  of  the  American  Federation  of  Labor,  which 
represents  approximately  200,000  people,  adopted  this 
resolution :  — 

Because  the  conservation  of  our  aged  citizens,  women  and  men,  is  better 
than  hoards  of  wealth;  because  we  believe  that  Nations  only  reach  great 
heights  of  prosperity  and  happiness  as  they  protect  and  care  for  their 
people;  because  we  know  that  happiness  and  prosperity  can  come  only  to 
the  Nations  which  care  first  for  the  children  of  God,  the  children  of 
men,  be  it 


58  SOCIAL  INSURANCE.  [Feb. 

Resolved,  That  the  State  Branch  of  the  American  Federation  of  Labor, 
in  convention  assembled,  give  its  full  support  to  the  establishment  by  the 
Commonwealth  of  Massachusetts  of  a  non-contributory  old-age  pension 
system,  to  keep  our  aged  citizens,  women  and  men,  free  from  the  fear  of 
want,  free  from  the  barbaric  stigma  of  pauperism  when  they  are  no  longer 
able  to  toil. 

This  resolution  came  after  labor  unionists  for  years  had  held 
that  they  did  not  want  pensions  of  any  kind,  holding  the  hope 
that  the  time  would  come  when  they  would  be  receiving  a  wage 
which  would  allow  them  to  save  for  old  age.  But  the  time  has 
not  come,  and  they  are  now,  as  the  resolution  says,  in  favor  of 
non-contributory  old-age  pensions,  because  they  are  unable  to 
save  for  old  age  under  the  living  conditions  of  the  day. 

As  a  further  demand,  in  1915  every  political  party  in  Massa- 
chusetts had  some  reference,  directly  or  indirectly,  in  its  plat- 
form relative  to  old-age  pensions,  or  to  some  means  of  protecting 
our  people  against  the  hazards  of  poverty  in  old  age.  Governor 
McCall,  mindful  of  the  people's  desires,  and  faithful  to  his 
promises,  said  in  his  inaugural  address  in  1916,  when  asking  for 
an  investigation  of  this  subject  with  a  view  to  securing  remedial 
legislation :  — 

The  members  of  the  majority  party  also  stand  pledged  to  an  investiga- 
tion for  the  purpose  of  devising  a  form  of  social  insurance  to  protect  the 
worker  against  the  vicissitudes  of  sickness,  unemployment  and  old  age. 
I  recommend  that  you  inaugurate  such  an  investigation  with  a  view  to 
the  passage  of  suitable  laws.  I  commend  to  your  attention  systems 
in  force  in  Germany,  Great  Britain  and  in  other  countries  in  reference  to 
these  subjects.  The  German  policy  was  established  by  Bismarck,  under 
whose  government  it  was  declared  in  1881,  in  a  speech  from  the  throne, 
that  "those  who  are  disabled  from  work  by  age  or  invalidity  have  a  well- 
grounded  claim  to  a  greater  care  from  the  State  than  has  hitherto  been 
their  share.  To  find  the  proper  means  for  their  care  is  a  difficult, 
but  also  one  of  the  highest,  tasks  of  any  community  which  rests  upon  the 
moral  foundation  of  a  common  Christian  life." 

Governor  McCall's  inaugural  address  in  1917  is  further  proof 
of  the  known  desire  to  have  such  a  pensions  system  as  we 
recommend  in  the  Commonwealth.  Our  Governor,  under- 
standing the  need,  specifically  requests  the  Legislature  to  enact 
a  system  of  old-age  pensions  without  contributory  provisions. 
This  splendid  appeal  is  epochal,  for  it  not  only  tends  to  help 


1917.]  HOUSE  —  No.  1850.  59 

and  to  protect  the  aged  people  of  Massachusetts,  but  also  those 
of  the  Nation.  It  is,  indeed,  an  emancipation  proclamation 
that  will  eventually  strike  the  shackles  of  old-age  poverty 
from  all  Americans. 

The  compelling  force  which  we  felt  it  our  main  duty  to  obey 
is  in  the  knowledge  of  the  humane  justice  and  the  bringing  of 
happiness  to  thousands  of  our  people  by  the  enactment  of  such 
a  pensions  law.  And  we  feel  intensely  that  such  a  law  will,  as 
it  did  in  England,  finally  win  the  favor  of  its  most  vigorous 
opponents  because  they  will  inevitably  profit  by  its  enactment, 
as  have  those  who  opposed  its  coming  in  the  United  Kingdom. 

The  protection  of  old-age  pensions  by  the  non-contributory 
method  is  needed  by  all,  and  is  such  that  those  who  are  now 
well-to-do  cannot  afford  to  be  against  it.  They  might  lose  their 
wealth,  as  others  have,  and  then  these  pensions  would  come  as  a 
godsend  to  them.  The  strangest  thing  of  all  is  that  the  great 
masses  of  our  people  have  been  willing  to  enter  old  age  and 
starve  for  years,  when  they  had  the  power  of  the  ballot  with 
which  to  provide  an  old-age  pensions  la\v.  The  retrospect  of 
thousands  of  good  citizens  who  have  suffered  because  of  lack  of 
means  in  old  age  is  a  sad  one  to  contemplate;  it  is  a  stain  upon 
the  honor  of  the  proudest  State  and  of  the  proudest  Nation  of 
the  world. 

We  desire  at  this  time  to  have  the  people  of  Massachusetts 
understand  that  in  recommending  a  non-contributory  old-age 
pensions  system  we  are  not  advocating  a  scheme  of  pensions 
which  has  not  already  had  a  practical  test.  It  has  been  in 
operation  in  New  Zealand  since  1898,  in  Australia  since  1909 
(the  entire  State),  and  in  England  since  1909.  In  all  these 
countries  the  law  has  given  entire  satisfaction. 

We  call  to  your  attention  the  fact  that  within  the  State  are 
systems  of  non-contributory  old-age  pensions  costing  several 
hundreds  of  thousands  of  dollars,  which  enormous  amount  is 
paid  from  the  people's  treasury  to  retired  public  servants  who 
have  always  had  better  hours  of  labor,  better  pay,  and,  con- 
sequently, greater  opportunity  to  provide  for  their  old  age  by 
saving.  Here  the  Commonwealth  has  established  the  precedent 
of  non-contributory  old-age  pensions  for  well-paid  government 
employees  at  the  people's  expense. 


60  SOCIAL  INSURANCE.  [Feb. 

In  the  city  of  Boston  the  amount  of  non-contributory  old-age 
pensions  reached  the  total  this  year  of  about  $588,000,  paid  by 
all  its  citizens  to  a  comparatively  few  former  government 
employees  now  retired  under  various  pensions  laws.  Other 
cities,  likewise,  have  civil  pensions  lists  on  the  non-contributory 
basis. 

In  1915  four  retired  judges  of  our  Supreme  Court  each 
received  a  retirement  pension  of  about  $625  a  month. 

In  1906  Justice  Charles  Allen  of  the  Supreme  Court  retired 
under  the  act  which  allows  judges  to  receive  a  special  pension. 
His  pension  was  $5,200  a  year,  and  he  continued  to  draw  this 
pension  for  about  seven  years,  until  his  death  in  1913.  When 
his  will  was  probated  it  was  found  that  he  left  an  estate  in- 
ventoried at  $776,970.52. 

Why  is  it  that  no  questions  about  "thrift"  are  brought  for- 
ward in  these  cases  of  civil  pensions  for  judges  and  others? 
Why  is  it  that  there  is  no  fear  of  lessening  the  "moral  fiber," 
or  of  the  "loss  of  manhood"  if  these  judges  and  other  such 
pensioners  do  not  contribute  to  the  general  fund?  Why  is  it 
that  no  questions  as  to  the  need  of  the  recipients  are  asked? 

When  these  pensions  were  established  the  majority  of  our 
people  had  little  or  no  knowledge  of  them  or  of  their  significance. 
They  have  little  or  no  knowledge  of  them  to-day;  and  yet 
everywhere  there  has  been  shown  dissatisfaction  with  a  system 
of  government  that  protects  a  privileged  and  exclusive  few  in 
their  old  age  with  non-contributory  pensions  at  the  expense  of 
those  who  are  excluded  from  such  pensions.  This  is  one  of  the 
causes  of  the  constant  and  irresistible  demand  for  such  pensions 
for  all  our  people  who  are  worthy  and  need  them. 

Every  citizen  of  Massachusetts  has  contributed  his  propor- 
tionate share  toward  these  pensions;  and  yet  in  their  old  age 
many  of  these  contributors  are  obliged  to  face  their  closing 
years  without  the  protection  of  pensions,  and  if  they  are  with- 
out means  they  must  accept  help  from  the  degrading  hand  of 
charity.  We  ask,  Is  such  a  system  of  pensions  just  or  equi- 
table? 

It  will  be  held  that  some  face  greater  dangers  in  public 
service  than  do  others  in  industrial  activity.  But  with  this 
opinion  we  cannot  agree.  We  find  in  the  great  industrial 


1917.]  HOUSE  —  No.  1850.  61 

establishments  high-speed  machinery  with  ever-present  danger 
to  the  workers;  we  find  such  dangers  in  railroading,  in  the 
building  trades  and  in  other  occupations.  In  comparison  with 
the  public  service  rendered  the  Commonwealth,  upon  which 
arguments  are  based  favoring  civil  pensions  for  judges  and 
other  government  employees,  we  place  the  good  mother  in  the 
home  and  the  toiler  in  industry,  and  hold  that  they,  whose 
employment  is  neither  as  remunerative  nor  as  steady,  and  whose 
opportunity  to  save  is  not  as  great,  render  as  good  service  to 
the  State  as  do  government  employees. 

The  opinion  has  been  advanced  that  the  system  of  pensions 
which  we  advocate  will  place  an  intolerable  burden  upon  the 
State,  but  we  do  not  believe  it  will  be  as  costly  as  our  present 
burdensome  and  highly  unsatisfactory  methods  of  creating 
pauperism  from  cold  and  ignominious  charity. 

Recent  statistics  (1915)  show  that  we  are  at  present  paying 
enormous  sums  for  known  public  and  private  poor-relief  amount- 
ing to  $3,233,948  for  approximately  36,496  people  sixty-five  years 
old  or  over.  This  great  amount  does  not  include  the  money 
spent  by  children  who  support  their  parents  or  by  those  who 
aid  needy  relatives  and  friends,  —  people  in  most  cases  who 
cannot  afford  to  do  so.  This  amount  of  money  not  ascertain- 
able  would  probably  run  into  the  millions.  If  this  unknown 
amount  could  be  added  to  the  cost  of  public  and  private 
charity  the  total  would  undoubtedly  exceed  $9,000,000  a  year. 
Increasing  the  approximate  number  of  people  who  accept 
known  public  and  private  poor-relief  from  36,496  to  50,000  — 
people  sixty-five  years  old  and  over,  with  a  maximum  pension 
of  $2.50  for  each  person  a  week,  and  adding  administration 
expenses  —  the  cost  would  aggregate  $6,500,000.  We  believe 
this  amount  would  not  overreach  the  total  now  expended  by 
relatives  and  friends,  joined  with  that  for  the  maintenance  of 
degrading  almshouses  throughout  the  State  and  for  the  support 
of  the  shameful  public  and  private  poor-relief  now  given  per- 
sons within  our  Commonwealth. 

We  believe  an  approximate  cost  of  a  system  of  non-contrib- 
utory old-age  pensions  may  be  ascertained  by  comparing  the 
expense  of  such  systems  in  proportion  to  the  population  of  such 
countries  where  similar  systems  are  in  operation. 


62  SOCIAL  INSURANCE.  [Feb. 

In  March,  1914,  the  total  amount  paid  in  old-age  pensions  in 
the  United  Kingdom  was  £12,370,299.  The  administrative 
expenses  were  "practically  inconsiderable,"  notwithstanding 
that  there  were  984,131  pensioners,  of  whom  931,344  were 
in  receipt  of  the  full  five  shillings  pension.  The  remainder 
received  less,  down  to  one  shilling,  under  the  schedule  of  the 
English  act  which  gives,  according  to  income  and  property, 
from  five  shillings  to  one  shilling  pensions.'  The  English  act 
covers  a  total  of  about  46,000,000  people  in  the  United  Kingdom. 

In  Australia,  in  1915,  the  total  number  of  old-age  pensioners 
was  90,892.  The  amount  paid  in  pensions  was  £2,691,317,  and 
the  amount  paid  to  benevolent  asylums  for  the  maintenance  of 
pensioners  was  £27,630.  The  cost  of  administration  in  propor- 
tion to  every  £100  of  pensions  and  asylum  payments  for  the  year 
1915  was  £1  15s.  (4  per  cent.).  The  total  number  of  pensioners 
to  every  10,000  of  the  population  was  184.  The  estimated 
population  of  the  Commonwealth  of  Australia  was  4,958,000  in 
1915. 

In  New  Zealand  on  March  31,  1915,  there  were  in  force 
19,352  pensions.  Payments  made  at  the  end  of  the  financial 
year  were  £460,814.  The  estimated  population  of  this  country 
was  1,095,994  in  1914. 

We  are  aware  that  it  is  impossible  to  state  at  this  time  just 
how  many  applications  would  be  forthcoming  for  pensions  here 
in  Massachusetts,  because  we  know  that  many  of  our  people 
are  practically  suffering  slow  starvation  rather  than  appeal  for 
poor-relief,  charity  or  enter  an  almshouse. 

It  should  be  understood  by  all  that  a  non-contributory  system 
of  pensions  like  that  which  we  recommend  is  a  partial  and  not  a 
universal  system.  It  is  partial  in  that  it  excludes  the  rich  and 
those  well-to-do,  who  could  not  comply  with  the  requirements 
as  to  qualifications  because  they  have  more  property  or  income 
than  one  would  be  allowed  to  possess  if  granted  a  pension. 
This  would  of  course  greatly  reduce  the  prospective  number  of 
applicants  under  any  age  group,  whether  or  no  the  pensionable 
age  were  placed  at  sixty-five  or  seventy  years.  Allowing  that 
there  are  about  189,000  men  and  women  over  sixty-five  years 
old  in  Massachusetts,  the  process  of  elimination  under  the 
qualifying  clauses  of  a  pensions  act,  as  shown  in  the  proposed 


1917.]  HOUSE  —  No.  1850.  63 

law  appended  hereto,  would  very  greatly  reduce  the  number  of 
those  who  would  be  eligible  under  this  age  limit,  and  the 
fabulous  figures  that  have  been  quoted  from  time  to  time  as  to 
the  cost  of  a  pensions  system  for  people  over  sixty-five  years 
old  wTould  be  shown  to  be  out  of  all  proportion  to  fact. 

The  non-contributory  system  is  not  new  under  our  form  of 
government.  Schools,  roads,  parks  and  all  other  public  im- 
provements are,  in  general,  paid  for  on  the  non-contributory 
basis  involving  direct  and  indirect  taxation.  No  one  specifically 
contributes  to  them.  They  are,  for  the  most  part,  provided 
from  general  taxation. 

In  conjunction  with  other  schemes  we  have  considered  the 
feasibility  of  a  compulsory  contributory  scheme  of  old-age 
pensions  similar  to  the  German  system,  maintained  from  funds 
contributed  by  the  State,  the  employer  and  the  employee,  but 
we  find  ourselves  unable  to  recommend  such  a  system  of  pen- 
sions. We  hold  that  such  a  system  as  this,  to  which  the  worker 
must  contribute,  would  be  an  unjust  immediate  taking  from 
him  of  that  money  he  cannot  afford  to  pay.  The  cost  of 
maintaining  a  compulsory  contributory  old-age  pensions  system 
with  its  complicated  system  of  bookkeeping,  and  other  details 
in  relation  to  those  employed  and  those  temporarily  out  of 
employment,  would  be  a  tremendous  and  needlessly  expensive 
burden  extending  over  forty  years  for  thousands  of  our  citizens 
in  the  checking  of  contributions  and  other  matters.  Without  a 
State  system  of  unemployment  protection  (insurance),  to  care 
for  the  worker  and  furnish  some  funds  for  him  during  periods  of 
unemployment,  there  might  occur  lapses,  making  endless  diffi- 
culties which  do  not  burden  the  non-contributory  system. 

There  is,  moreover,  the  proper  American  repugnance  to  being 
compelled  by  law  to  contribute  specifically  to  any  purely 
governmental  function  of  this  character.  The  majority  of  our 
people  will  demand  that  such  protection  as  this  should  come 
to  them  without  any  such  requirements. 

Let  us  set  these  difficulties  aside  for  a  moment,  and  analyze 
the  compulsory  contributory  system  and  see  who  pays  the  cost 
which,  superficially,  is  said  to  be  borne  by  three  distinct  con- 
tributors, —  the  State,  the  employer  and  the  employee. 

1.  We  find  that  when  the  State  contributes  it  is  the  people's 


64  SOCIAL  INSURANCE.  [Feb. 

contribution;   and  as  the  workers  constitute  the  greater  number, 
in  this  first  instance  they  pay  the  bill. 

2.  When  the  employer  contributes,  he  being  a  manufacturer 
of  the  necessaries  of  life,  such  as  shoes,  clothing,  etc.,  he  will 
charge  this  contribution  expense  to  the  cost  of  the  products 
which  he  sells  to  the  workers.     And  again  the  workers  pay  the 
bill. 

3.  Now  comes  the  employee's  contribution.     Again  he  pays. 
Consequently  the  workers  pay  the  entire  bill  or  contribution. 

It  is  no  mystic  problem,  this  contributory  system,  but  simply 
a  contributory  hand  entering  the  pockets  of  the  workers  three 
times  and  compelling  them  to  pay  it  all. 

Is  such  a  system  a  fair  one  which  puts  on  the  backs  of  the 
major  part  of  our  people,  the  workers,  the  entire  cost?  What 
is  to  be  done  with  those  who  are  past  fifty  years  old,  whose 
earnings  are  very  limited  and  who  could  not  under  any  possible 
circumstance  contribute?  If  the  contributory  has  been,  or  can 
be  proven  to  be  of  greater  value  than  the  non-contributory 
system,  why  is  it  that  the  countries  which  have  such  a  system 
have  not  changed  to  the  contributory  plan? 

It  is  extremely  difficult  to  determine  just  what  amount  should 
be  granted  as  a  full  old-age  pension,  but  the  following  figures 
given  by  the  State  Board  of  Charity  as  to  the  present  cost  of 
caring  for  the  aged  are  interesting  and  may  suggest  the  likely 
amount:  — 

From  all  this  office  knows  of  local  expenditure  for  indoor  poor-relief, 
$3.50  per  week  would  represent  a  fair  average  per  capita  cost  for  the  sup- 
port of  each  person  over  sixty-five  years  of  age  in  almshouses.  This  would 
represent  an  average  yearly  cost  for  each  person  of  $182. 

In  answer  to  the  question,  Confining  the  question  to  citizens 
of  the  Commonwealth,  what  was  the  largest  and  what  was  the 
smallest  amount  supplied  any  needy  person  over  sixty-five  years 
of  age  in  1916,  they  reply  that  the  figures  are  unknown. 
Answering  the  question,  What  is  the  most  costly  institution  of 
poor  or  almshouses,  they  say:  - 

Taking  the  question  to  mean  the  costliest  institution  on  a  per  capita 
basis  for  the  year  just  closing,  the  most  costly  institution  is  probably  that 
of  Milton,  where  the  expenses  are  in  the  neighborhood  of  $10  a  week  for 


1917.]  HOUSE  —  No.  1850.  65 

all  inmates.  In  addition  the  institution  provides  very  good  care  for  its 
patients.  The  institution  which  costs  the  largest  gross  amount  is  that  of 
Boston,  because  of  its  numbers. 

We  quote  these  figures  from  the  State  Board  of  Charity  as  ar 
particular   indication   of   what  the   Commonwealth   spends   at 
times  for  indoor  poor-relief.    What  good  citizen  who  refuses  to 
accept  pauperism  is  not  entitled  to  the  same  expenditure  for 
his  comfort  in  old  age? 

We  wish  to  call  your  attention  to  the  fact  that  we  are  now 
compelled  to  care  for  any  needy  people  of  advanced  years 
should  such  need  come  to  the  attention  of  the  authorities. 
Consequently,  the  expense  of  old-age  pensions  could  not  be 
considered  an  entirely  new  burden  upon  the  State  in  the  form 
of  taxation,  as  many  people  receiving  such  poor-relief  would 
become  old-age  pensioners.  As  a  further  suggestion  of  proof 
that  the  funds  now  used  for  outdoor  and  indoor  paupers,  public 
and  private  poor-relief,  would  in  a  large  measure  be  transferred 
to  a  pensions  fund  without  the  necessity  of  asking  for  new 
appropriations  for  such  people,  we  quote  the  following  from  the 
sixty-second  statistical  abstract  of  1915  of  the  United 
Kingdom :  - 

A  number  of  paupers,  especially  outdoor  paupers,  ceased  to  be  de- 
pendent on  poor-relief  in  1911  in  consequence  of  the  partial  removal  of 
the  pauper  disqualification  for  old-age  pensioners.  .  .  .  The  total  number 
of  indoor  paupers  over  seventy  years  of  age  (pensionable  age)  decreased 
from  57,000  at  Jan.  1,  1910,  to  47,197  at  Jan.  1,  1915.  Correspondingly, 
the  number  of  outdoor  paupers  decreased  from  138,223  at  Jan.  1,  1910, 
to  8,456  at  Jan.  1,  1915. 

These  figures  relate  only  to  England  and  Wales,  and  do  not 
include  Scotland  and  Ireland  or  other  parts  of  the  United 
Kingdom.  It  will  be  found  by  these  figures  that  numbers  of 
outdoor  paupers  change  to  pensioners  without  added  expense 
to  the  government.  It  is  conclusive  evidence  that  the  people 
prefer  to  be  pensioners  rather  than  paupers. 

The  State  Board  of  Charity's  report  for  the  year  1915  gives, 
as  a  total  valuation  of  almshouses  in  Massachusetts,  $4,732,- 
129.53.  The  cost  of  repairs  for  the  year  amounts  to  $305,901.18 
of  which  $169,075.54  was  spent  on  new  construction  at  Long 


66  SOCIAL  INSURANCE.  [Feb. 

Island,  Boston.  These  figures  are  based  on  returns  made  by  the 
overseers  of  the  poor  for  the  cities  and  towns. 

The  total  amount  of  salaries  for  wardens  and  matrons  is 
$108,287.  In  167  almshouses  the  management  is  in  the  hands 
of  wardens  and  matrons,  and  in  5  by  a  matron  only,  which 
makes  the  State's  total  of  172  almshouses.  The  combined 
salaries  for  these  officials  average  about  $1,200  a  year  for  the 
cities  and  about  $500  for  the  towns,  in  addition  to  their  board 
and  lodgings.  About  three-fourths  of  the  cities  and  towns 
employ  a  total  of  519  assistants  who  are  generally  paid  by  the 
city  or  town,  except  in  a  few  instances  by  the  wardens.  We 
find  that  the  town  of  Acton  has  an  almshouse  property  valua- 
tion of  $5,000  and  a  total  annual  cost  of  $2,070.86,  with  a  net 
cost  of  $649.39.  There  were  but  two  inmates,  one  between 
sixty  and  seventy,  and  the  other  between  seventy  and  eighty. 
The  average  cost  per  person  outside  of  the  property  investment 
was  $324.69. 

The  town  of  Adams'  almshouse  valuation  is  $20,262.  Its 
total  annual  cost  is  $6,903.30,  with  a  net  cost  of  $4,874.09. 
There  were  25  inmates  at  an  average  cost  of  maintenance  per 
person  of  $194.96. 

The  town  of  Bellingham's  almshouse  valuation  was  $9,957.32. 
Its  total  annual  cost  was  $3,381.10,  with  a  net  cost  of  $1,229.77. 
The  three  inmates  averaged  a  per  capita  cost  of  $409.59. 

The  town  of  Easton's  almshouse  valuation  was  $6,335. 
Total  annual  cost  was  $4,324.91.  Net  cost,  $2,434.78.  The 
average  cost  for  the  six  inmates  was  $405.76  each. 

The  almshouse  valuation  for  the  city  of  New  Bedford  was 
$186,650.  Total  annual  cost  was  $38,845.98,  with  a  net  cost  of 
$35,65§.13.  At  the  time  of  visitation  there  were  198  inmates, 
and  the  average  cost  of  maintenance  of  each  was  $180.09. 

The  almshouse  valuation  in  the  town  of  North  Andover  was 
$14,000.  Total  annual  cost  was  $4,247.48,  and  the  net  cost 
$3,661.02.  Six  inmates  averaged  an  expense  per  person  of 
$610.17. 

In  North  Reading  the  town's  almshouse  has  a  valuation  of 
$9,000.  Total  annual  cost  was  $4,245.93.  Net  cost,  $141.95. 
This  institution  had  but  1  inmate. 

Reading's  almshouse  valuation:    $9,500.     Total  annual  cost, 


1917.]  HOUSE  — No.  1850. 

$2,625.24.  Net  cost,  $2,035.75.  Number  of  inmates,  6,  at  an 
average  cost  per  person  of  $339.29. 

We  call  your  attention  to  the  immense  total  amount  now 
being  expended  in  the  Commonwealth  for  degrading  almshouses, 
and  the  staggering  total  invested  in  these  various  properties 
amounting  to  nearly  $5,000,000  to  provide  for  a  total  of  only 
5,007  persons.  The  foregoing  list,  selected  at  random  from  the 
Board's  report,  shows  significant  figures  in  the  general  cost  per 
person,  the  lowest  in  the  list  being  $141.95,  at  Reading,  and  the 
highest  being  '$610,  at  North  Andover.  These  figures  prove 
conclusively  to  us  that  a  great  number  of  the  almshouses  in 
the  Commonwealth  should  be  abolished,  and  that  a  large 
county  pension  home  should  be  established  for  purpose  of 
economy  in  each  of  the  several  counties,  using  the  best  alms- 
house,  where  possible,  to  house  those  unable  to  care  for  them- 
selves and  who  are  without  friends  or  relatives  and  need  such 
institutional  care. 

The  total  number  of  inmates  in  the  almshouses  throughout 
the  Commonwealth  in  1915  (the  latest  available  statistics)  was 
5,007  persons.  Combining  the  cost  of  repairs  that  year  with 
improvements  and  the  assessed  valuation,  together  with  the 
salaries  and  expenses  of  wardens  and  matrons,  the  grand  total 
expense  is  $5,146,317.71.  The  investment  for  these  5,007  in- 
mates averages  $1,027.82  per  person.  It  is  our  belief  that  a 
large  part  of  this  cost  for  institutional  care  would  be  unneces- 
sary if  the  greater  majority  of  these  people  were  old-age  pen- 
sioners and  could  live  in  private  families  or  in  the  homes  of 
relatives.  In  fact,  several  towns  have  already  come  to  this 
conclusion  and  are  supporting  such  dependents  in  private 
families.  Included  in  such  towns  are  Marshfield,  Huntington 
and  Chester. 

In  considering  how  to  obtain  the  necessary  funds  to  support 
such  a  system  of  non-contributory  old-age  pensions  without 
new  or  extra  taxation,  we  include  for  your  careful  study  a  declara- 
tion made  by  the  Tax  Commissioner  of  the  Commonwealth  in 
his  report,  House,  No.  2290  of  1913,  relative  to  the  enormous 
amount  of  intangible  personalty  (stocks,  bonds,  etc.)  which 
has  escaped  taxation  for  years,  though  legally  taxable. 

Tax  Commissioner  William  D.  T.  Trefry  said  in  this  report:  — 


68  SOCIAL  INSURANCE.  [Feb. 

That  .  .  .  $4,646,264,910  is  intangible  personalty  subject  to  taxation, 
but  which  is  not  taxed  because  the  Legislature  of  the  Commonwealth  has 
never  been  willing  to  enact  laws  to  compel  its  disclosure.  These  considera- 
tions point  to  an  amount  and  value  of  intangible  personalty  in  this  Com- 
monwealth which  escapes  taxation  which  is  astounding. 

This  statement  shows  that  while  the  little  householder  and 
the  loaf-of-bread  buyer  have  been  continually  taxed  directly 
and  indirectly  to  bear  the  burdens  which  this  great  wealth 
should  have  equally  borne,  the  owners  of  these  billions  of 
dollars'  worth  of  intangible  personality  legally  taxable  have 
evaded  their  just  responsibilities  because  Legislatures  have  been 
indifferent.  The  income  from  taxation  due  the  State  from  this 
property  was  estimated  nearly  four  years  ago  to  be  over 
$50,000,000,  of  which  the  larger  part  was  never  paid.  If  this 
property  had  been  compelled  to  yield  the  taxes  due  from  it 
there  would  have  been  enough  to  provide  old-age  pensions  and 
other  social  welfare  measures  without  any  thought  of  added 
taxation.  A  new  income  tax  law  has  recently  been  enacted, 
and  it  is  expected  that  it  will  obviate  the  difficulties  of  which 
the  Tax  Commissioner  complains. 

While  we  do  not  believe  it  will  get  more  in  taxes  from  the 
intangible  personalty  than  could  have  been  secured  under  the 
old  method,  if  a  proper  and  drastic  disclosure  law  had  been 
enacted,  it  may,  nevertheless,  give  the  Commonwealth  an 
opportunity  to  know  who  are  the  owners  of  this  property  and 
where  to  tax  it. 

Here  is  the  nest-egg  that  should  bear  the  burden  of  old-age 
pensions. 

We  recommend  that  an  extra  2-mill  tax  per  thousand  be 
placed  on  such  holdings  which  come  under  the  new  income  tax 
law  where  the  value  of  such  property  held  by  an  individual, 
directly  or  indirectly,  is  more  than  $2,000.  We  believe  that 
this  2-mill  tax,  if  applied,  would  bring  at  least  $10,000,000  of 
new  money,  of  just  taxes,  into  the  State  treasury,  and  would 
not  place  a  new  direct  burden  upon  real  estate,  but  would  be 
a  just  contribution  from  that  wealth  which  has  for  years  evaded 
taxation  while  the  masses  of  our  people  have  been  compelled  to 
pay.  If  this  contemplated  amount,  or  a  good  part  of  it,  were 
added  to  the  amount  we  now  spend  to  degrade  our  aged  people 


1917.]  HOUSE  — No.  1850. 

with  poor-relief  in  its  various  forms,  we  would  have  more  than 
enough  with  which  to  establish  and  maintain  a  non-contribu- 
tory old-age  pensions  system. 

As  another  method  by  which  to  obtain  funds  for  such  a  pen- 
sions system,  we  recommend  that  the  Commonwealth  open  an 
old-age  fund,  to  be  open  forever  to  receive  bequests,  contribu- 
tions, escheats,  unclaimed  savings,  unredeemed  railroad  pas- 
senger rebates  and  other  moneys.  Our  reason  for  this  recom- 
mendation is  based  on  the  fact  that  there  have  been  millions 
of  dollars  left  by  people  in  the  State  to  benefit  old  people's 
homes  and  private  charitable  organizations,  and  we  believe 
that  if  it  were  known  that  the  Commonwealth  had  opened  such 
a  fund  to  help  protect  its  worthy  aged  citizens  it  would,  if 
properly  .advertised,  receive  a  large  amount  of  money.  But, 
withal,  if  it  should  be  necessary  to  include  any  of  the  cost  in  the 
general  tax  levy,  we  are  agreed  that  it  should  be  done,  for  we 
feel  that  the  general  welfare  will  be  so  much  benefited  that  all 
can  afford  and  will  be  willing  to  bear  a  proportionate  cost.  The 
principle  of  old-age  pensions  being  sound,  surely  we  are  able 
to  get  the  money  necessary  to  maintain  such  a  system. 

With  the  same  problem  in  view  we  call  to  your  attention  the 
fact  that  there  are  at  present  savings  banks  assets  within  the 
Commonwealth  of  $1,078,282,174  and  deposits  amounting  to 
$997,000,000,  represented  by  2,457,264  accounts,  an  average 
of  $406.02  for  each  Account.  The  question  in  our  minds  in 
relation  to  this  vast  amount  of  savings  is  whether,  by  the  in- 
corporation of  a  State  savings  bank,  this  money  could  not  be 
handled  under  the  direction  of  the  Commonwealth  with  a 
greater  degree  of  safety  than  is  now  given  it,  and,  at  the  same 
time,  be  made  to  pay  larger  dividends  by  loaning  such  money 
directly  to  the  highest  bidder,  and  sharing  such  earnings,  after 
the  expenses  of  administration  have  been  deducted,  with  those 
who  have  struggled  to  acquire  these  savings.  Instead  of  per- 
mitting this  money  to  pay  only  3  or  4  per  cent,  to  the  depos- 
itors through  the  indirect  methods  now  employed  of  permitting 
certain  propositions  to  be  called  ''savings  bank -investments," 
and  allowing  the  use  of  this  money  to  help  those  who  control 
such  propositions  to  make  large  fortunes  from  such  savings 
while  the  depositors  themselves  receive  comparatively  small 


70  SOCIAL  INSURANCE.  [Feb. 

and  insignificant  returns,  the  State  should  enter  the  savings 
bank  business,  if  possible,  to  benefit  not  only  depositors,  but 
also  the  public  treasury  and  old-age  pensions. 

We  would  have  gone  more  extensively  into  a  discussion  of  the 
various  systems  of  old-age  pensions,  insurance  and  annuities, 
but  they  have  been  treated  in  House,  No.  1400  of  the  year 
1910,  while  civil  pensions  have  been  considered  in  House,  No. 
2400  of  the  year  1914.  We  desire  to  say,  however,  that  we  do 
not  agree  with  their  conclusion  that  no  general  system  of  old- 
age  pensions  is  needed  within  the  Commonwealth. 

We  recommend  that  a  study  be  made  of  the  old-age  pensions 
laws  now  in  use  in  the  United  Kingdom,  Australia  and  New 
Zealand,  for  each  of  these  countries  has  had  the  non-contrib- 
utory plan  in  operation  for  many  years.  We  call  special  at- 
tention to  the  invalidity  part  of  the  Australian  act,  and  to  that 
part  of  the  New  Zealand  act  which  in  general  allows :  — 

Any  person  otherwise  qualified  to  receive  a  pension  who  owns  property 
on  which  he  resides,  and  which  does  not  permit  of  the  granting  of  a  full 
pension,  may  qualify  for  the  full  pension  by  transferring  the  said  property 
to  a  public  trustee.  The  pensioner  is  permitted  to  reside  on  the  said  prop- 
erty, rent  free,  during  his  lifetime,  but  he  must  pay  all  rates  and  charges 
thereon.  If  a  husband  and  wife,  both  being  pensioners,  are  living  together 
and  one  dies  the  survivor  is  permitted  to  continue  to  reside  on  the  prop- 
erty. On  the  death  of  both  pensioner  and  survivor,  or  where  the  pensioner 
is  no  longer  entitled  to  a  pension,  the  public  trustee  shall  sell  the  property, 
and,  after  deducting  from  the  proceeds  of  the  sate  the  amount  of  pension 
paid  as  a  consequence  of  the  transfer  of  the  property,  together  with  his 
commission  and  interest  at  the  rate  of  four  per  cent.,  shall  pay  the  balance 
to  the  person  or  persons  entitled  thereto.  Provision  is  made  for  a  pensioner 
or  survivor,  or  next  of  kin,  paying  such  amounts  as  aforesaid  at  any  time 
with  a  view  to  obtaining  a  retransfer  of  the  property  and  obviating  a  sale. 

This  appears  to  us  to  be  an  excellent  provision,  as  the  whole 
accumulation  after  years  of  toil  of  some  of  our  people  is  rep- 
resented in  a  little  home  or  farm.  When  the  powers  to  earn 
have  lessened,  and  there  is  not  even  a  small  income  to  provide 
the  necessary  wants,  it  often  becomes  imperative  for  the  owners 
of  such  property  to  mortgage  or  sell  their  little  homes.  This 
provision  in  many  cases  would  obviate  such  possibilities  and 
allow  those  who  so  desire  to  remain  during  life  in  the  home 
which  represents  all  they  possess  after  their  years  of  struggle. 


1917.]  HOUSE  —  No.  1850.  71 

It  is  sometimes  argued  by  those  who  do  not  believe  they  will 
ever  have  need  of  an  old-age  pension  that  they  should  not  be 
compelled  to  contribute  directly  or  indirectly,  through  taxation, 
to  the  support  of  those  who  will  become  pensioners.  If  these 
dissenters  were  the  only  ones  in  the  State  who  contributed  taxes 
for  things  not  specifically  used  by  them,  or  for  their  protection, 
the  workers  would  have  a  weaker  foundation  upon  which  to 
base  their  arguments  for  a  non-contributory  old-age  pensions 
law.  But  the  workers  know  they  do  contribute  the  greater 
amount  in  the  building  and  upkeep  of  State  roads  over  which 
the  well-to-do  automobilists  travel,  and  over  which  the  workers 
themselves  seldom  if  ever  go.  Workers  without  children  con- 
tribute through  their  direct  and  indirect  taxes  to  the  support 
of  our  public  schools  in  which  the  children  of  all  are,  or  can  be, 
educated.  They  support  our  public  parks  and  other  civic 
improvements  which  enhance  the  value  of  adjoining  properties, 
-  the  real  estate  of  others,  —  parks  to  which  the  masses  of  the 
workers  never  can  go. 

This  is  but  proof  of  the  contention  that  every  one  in  society 
is  bearing  the  burdens  of  others.  It  is,  in  fact,  the  fundamental 
basis  upon  which  society  is  organized  in  the  form  of  a  Common- 
wealth for  mutual  protection.  "  It  is  a  social  compact  by  which 
the  whole  people  covenent  with  each  citizen,  and  each  citizen 
with  the  whole  people,  that  all  shall  be  governed  by  certain 
laws  for  the  common  good"  (Preamble  Massachusetts  Consti- 
tution). 

If  small  householders  object  to  helping  others  to  an  old-age 
pension,  citizens  who  do  not  own  houses,  but  who  pay  for  fire 
and  police  protection  and  other  civic  betterments  which  enhance 
the  value  of  the  objecting  householders'  property,  could  just  as 
well  complain  that  they  are  providing  something  for  others 
through  direct  and  indirect  taxation  out  of  which  they  receive 
little  or  no  direct  benefits.  Some  think  that  the  small  house 
owner  and  the  real  estate  owner  are  the  only  ones  who  will  be 
obliged  to  pay,  through  taxation,  for  the  costs  of  non-contrib- 
utory old-age  pensions.  This  opinion  is  an  error,  for  such 
taxes  are  paid  in  the -majority  of  cases  by  the  rent-payers.  In 
such  a  city  as  Boston  there  are  thousands  of  people  living  in 
apartments  who  are  continually  paying  taxes  through  their 


72  SOCIAL  INSURANCE.  [Feb. 

rents;  they  do  not  own  real  estate,  but  they  are,  logically,  the 
real  taxpayers.  Surely  it  is  this  great  army  of  rent-payers  who 
have  the  right  to  complain,  —  these  rent-payers  who  bear  the 
unfair  burden  and  who  can  easily  prove  at  all  times  that  they 
are  paying  for  everything  they  get. 

There  has  been  much  moralizing  as  to  what  should  consti- 
tute deserving  citizenship  under  a  pensions  law.  This  argu- 
ment and  that  argument  have  been  used  against  granting  of 
pensions  because  of  some  inconsequential  condition  in  which  the 
applicant  might  have  found  himself  during  life.  It  is  impos- 
sible for  a  Commonwealth  to  legislate  upon  such  superficial 
details.  We  know  that  some  people  are  mentally  unequal  to 
enter  the  battle  of  money-making  against  those  of  greater 
mentality;  we  know  that  many  people  would  refuse  to  make 
money  in  a  manner  that  others  would  not  hesitate  to  employ; 
hence,  moral  honesty  may  be  a  prime  factor  of  their  inability 
to  amass  funds  for  their  old  age.  Shall  we  condemn  this 
honesty  and  penalize  those  who  practice  it  by  the  poorhouse 
and  pauperism?  Shall  we  say  to  the  man  who  has  no  wealthy 
relatives  who  could,  by  bequest,  protect  his  old  age,  "You  are 
condemned  to  the  horrors  of  want  when  age  has  made  it 
impossible  for  you  to  toil  and  protect  yourself"? 

The  Commonwealth  cannot  legislate  morals  into  its  people, 
nor  can  it  equalize  the  ability  and  the  earning  power  of  its 
citizenry.  Likewise,  it  cannot  legislate  thrift,  nor  can  it  legis- 
late against  the  laws  of  probability,  nor  can  it  enact  laws  that 
will  make  possible  the  coming  of  good  fortune,  so  that  all  our 
people  will  be  enabled  to  protect  themselves  through  life. 
There  can  be  no  question  but  that  all  our  people  desire  to  be 
self-supporting  through  life;  but  circumstances  over  which  they 
have  no  control  bring  them  to  an  inevitable  want  in  old  age. 

The  struggle  to  hold  a  position  after  one  has  reached  the  age 
of  fifty,  not  to  speak  of  sixty-five,  is  becoming  more  and  more 
difficult,  and  the  demand  for  younger  workers  to  fill  the  places 
of  the  older  employees  continually  increases.  What  are  we  to 
do  with  such  workers?  We  are  in  duty  bound  to  protect  them; 
it  is  a  real  and  just  duty  of  the  State.  Yet  our  people  toil  on, 
hope  on,  with  the  thought  that  perhaps  the  good  fortune  will 
be  theirs  which  will  always  make  them  self-providing.  Shall 


1917.]  HOUSE  — No.  1850.  73 

we  penalize  them  for  their  honest  toil  when  they  fail?  Shall  we 
consign  them .  to  the  degradation  of  pauperism  because  they 
have  hoped,  because  they  have  aspired,  because  they  have 
failed  righteously? 

For  years  many  different  bogeys  have  been  used  to  prevent 
the  coming  of  non-contributory  old-age  pensions.  It  has  been 
said  that  it  will  destroy  some  mystic  "independence"  of  our 
people;  that  it  will  lessen  the  wonderful  buncombe  "thrift,"  or 
fail  to  keep  the  "moral  fiber"  of  our  people  stimulated;  that 
it  will  lessen  "filial  obligation,"  or,  perhaps,  some  "indolent 
citizen"  would  receive  a  pension.  We  are  unwilling  to  let  such 
implications  go  unchallenged,  because  we  know  that  our  citi- 
zens deserve  better  treatment. 

If  it  is  true  that  a  system  of  non-contributory  old-age  pen- 
sions to  protect  our  people,  which  does  not  require  any  specific 
contributions,  will  break  down  our  manhood  ideals,  why  is  it 
that  our  school  system,  our  police  and  fire  systems,  our  public 
parks  systems,  and  other  governmental  businesses  which  are  on 
similar  non-contributory  bases,  without  specific  contributions, 
do  not  act  as  a  deterrent  to  high  standards  of  citizenship?  To 
be  logically  consistent,  then,  why  not  make  specific  contribu- 
tions to  all  these  governmental  departments  which,  like  non- 
contributory  old-age  pensions,  insure  protection? 

Ampng  the  many  fallacious  claims  made  is  that  some  of  our 
people  will  become  indolent  if  a  non-contributory  system  of  old- 
age  pensions  is  enacted;  it  is  claimed  they  will  suffer  the.  hard- 
ships of  a  long  period  of  forty  years  or  more  because  of  their 
indolence,  so  that  at  last  they  may  receive  a  small  pension.  We 
cannot  believe  that  any  great  number  of  our  people  would 
forego  the  opportunity  of  active  participation  in  profitable 
work  which  would  insure  much  more  ample  comfort  than  would 
be  theirs  from  a  small  pensions  allowance  in  old  age.  As  a 
proof  that  such  fears  are  not  based  on  facts,  indolence  is  a  dis- 
qualification under  pensions  laws.  As  an  instance  we  quote 
from  the  English  old-age  pensions  act:  — 

A  person  shall  be  disqualified  .  .  .  if,  before  he  becomes  entitled  to  a 
pension,  he  has  habitually  failed  to  work  according  to  his  ability,  oppor- 
tunity and  need  for  the  maintenance  or  benefit  of  himself  and  those  legally 
dependent  upon  him. 


74  SOCIAL  INSURANCE.  [Feb. 

This  is  but  one  of  such  regulations  in  the  English  pensions 
law  that  immediately  destroys  the  fantasy  of  those  who  believe 
that  a  pension  would  come  to  the  indolent  and  slothful. 

We  advance  the  thought  that  it  would,  indeed,  be  better  to 
treat  even  the  so-called  unworthy  aged  with  the  same  kindness 
and  forbearance  we  give  the  unfortunate  criminal.  No  one 
would  wish  to  permit  great  numbers  of  our  people  to  suffer  the 
brutality  of  poverty  in  old  age  because  they  fear  that  some  so- 
called  unworthy  person  might  receive  a  pension.  Shall  we  con- 
demn to  the  scrap-heap,  like  so  much  wasted  material,  thou- 
sands of  good  citizens  because  we  are  inane  fault  finders  and 
finicky  dissectors  of  the  moral  worth  in,  and  the  causes  of  in- 
digence among,  our  people?  Even  if  they  have  shortcomings  as 
to  morality  and  worth,  as  citizens  in  our  Commonwealth  these 
people  are  of  us,  children  of  some  parents;  they  are  a  part  of 
the  organic  whole,  and  should  be  treated  as  a  Christian  State 
must  treat  its  people. 

Any  effort  to  determine  the  blameable  and  unblameable  in 
human  affairs  must  be  done  by  those  with  superhuman  pre- 
rogatives. We  do  not- claim  to  be  able  to  judge  mankind,  and 
divisions  as  to  worthiness,  if  they  are  to  be  finally  drawn,  must 
be  made  by  others .  However,  in  dealing  with  everybody  we 
believe  that  a  non-contributory  old-age  pensions  system  will 
have  an  edifying  effect,  —  will  be  an  incentive  to  good  citizen- 
ship as  a  necessary  requirement  for  qualification. 

There  is  a  belief  that  the  recent  law  passed  in  Massachusetts 
compelling  children  to  support  their  destitute  parents  will,  in 
large  measure,  reduce  the  need  of  old-age  pensions.  We  do  not 
.agree  with  this  idea,  for  we  know  that  very  few  parents  would 
desire  to  bring  their  children  into  court,  knowing  well  that  it 
would  result  in  unpleasant  relations  with  them.  There  are 
those  who  are  unmarried,  or  who  have  no  children,  or  whose 
children  are  not  residents  of  the  State,  and,  therefore,  beyond 
the  jurisdiction  of  our  courts.  The  most  unfair  aspect  of  this 
law  is  that  the  children  of  our  pensioners  are  not  subject  to  its 
unpleasant  provisions  because  of  this  class  legislation,  while  the 
remainder  of  our  citizens  whose  parents  do  not  receive  such 
pensions,  but  who  provide  the  money  which  supplies  these 
special-privilege  pensions,  are  amenable  to  the  penalties  of  this 
law.  If  this  is  not  unfair  class  legislation,  what  is  it? 


1917.]  HOUSE  — No.  1850. 

We  dislike  the  condemning  suggestion  contained  in  this  law 
that  our  people  must  be  forced  to  do  that  which  they  would 
willingly  do  if  they  at  all  times  had  the  means.  We  cannot 
consider  the  assumption  that  such  a  law  will  ever  have  the- 
decent  purpose  that  permits  it  to  take  the  place  of  old-age 
pensions;  and  we  further  claim  that  every  worthy  man  and 
woman,  citizens  of  the  Commonwealth,  are  entitled  to  the  in- 
dependent protection  of  a  pension,  so  that  they  shall  not  be 
under  obligations  or  become  burdens  to  relatives  and  friends. 
Whatever  are  the  merits  of  such  a  law  we  are  unwilling  to  allow 
our  people  to  be  stigmatized  by  it  as  lacking  love  and  respect 
for  their  parents.  We  entirely  disapprove  the  assumption  that 
the  enactment  of  a  non-contributory  old-age  pensions  law  will 
lessen  filial  obligations,  will  lessen  love  for  and  protection  of 
parents  by  their  children.  For  we  know  that  a  pensions  income 
for  the  aged,  however  small,  would  make  both  parents  and 
children  happier  and  keep  them  together. 

The  saddest  happening  in  the  lives  of  sons  and  daughters  is. 
when  they  find  themselves  unable  to  protect  their  fathers  and 
mothers  because  of  the  expense  of  their  own  immediate  families, 
—  the  expenses  of  unemployment,  sickness,  and  other  exigencies 
which  continually  press  upon  them.  It  has  been  proved  in 
countries  where  non-contributory  old-age  pensions  are  granted 
the  aged  parents  that  it  has  not  lessened  filial  obligations,  — 
respect  for  parents,  —  but,  on  the  contrary,  has  made  family 
ties  stronger  and  happier. 

To  show  further  that  old-age  pensions  of  the  non-contributory 
plan  in  a  great  measure  creates  conditions  which  promote  re- 
gard for  parents  instead  of  lessening  it,  we  quote  from  the  New 
Zealand  Pensions  Commissioner's  report  for  1905:  — 

One  phase  of  the  old-age  pensions  scheme  to  which  I  desire  to  direct 
attention  is  that  which  has  resulted  in  the  improved  relations  between  the 
younger  generation  and  their  aged  parents.  Prior  to  the  introduction  of 
the  act  it  was  with  extreme  difficulty  that  numbers  of  sons  and  daughters 
throughout  the  colony  were  able  to  make  proper  provision  for  the  welfare 
of  fathers  and  "mothers  who  had  reached  the  age  when  work  was  out  of  the 
question,  and  when  in  many  instances  the  state  of  health  demanded  the 
utmost  care  and  attention.  This,  though  often  ungrudgingly  given,  neces- 
sjitated  a  great  amount  of  self-denial  and  an  added  expenditure  that  could 
be  ill  afforded.  Now,  with  the  beneficent  old-age  pensions  act  on  the 
statute  book,  the  old  order  of  things  has  been  changed  in  many  directions ; 


76  SOCIAL  INSURANCE.  [Feb. 

and  with  the  change  that  has  been  brought  to  the  home  of  many  of  our 
young  colonists  that  measure  of  assistance  which  has  been  sufficient  to  lift 
them  from  drudgery,  and,  in  some  instances,  want,  to  the  realm  of  com- 
parative comfort.  For,  by  means  of  the  aid  now  given  them  by  their  aged 
parents  in  the  shape  of  the  pension,  they  have  been  freed  from  the  evil 
which  is  perhaps  the  surest  destroyer  of  their  domestic  happiness,  namely, 
the  anxiety  created  by  the  difficulty  in  providing  the  necessaries  of  life; 
and  aged  people  now  receive  at  the  hands  of  their  children  an  amount  of 
consideration  which  it  was  practically  impossible  for  the  latter  to  previously 
bestow.  ...  In  many  instances  the  freedom  which  has  come  to  the 
younger  generation  haS  resulted  in  their  sphere  of  influence  in  the  world 
being  enlarged,  in  that  they  now  find  themselves  in  position  to  marry,  and 
are  thus  able  to  add  to  the  wealth  of  the  State  be  the  bringing  up  of 
families. 

Thousands  of  our  citizens  know  full  well  the  truth  contained 
in  this  statement  from  New  Zealand.  Every  condition  spoken 
of  in  it  has  come  home  to  everybody,  and  has  been  a  cause  of 
unhappiness  and  bitterness  in  many  families,  which  non-con- 
tributory pensions  would  correct. 

It  is  impossible  for  us  to  see  how  the  majority  of  the  workers, 
try  as  they  will  and  do,  can  save  anything  from  their  weekly 
wage  after  meeting  the  living  expenses  of  the  week,  with  the  at- 
tendant incidentals  due  to  sickness,  unemployment  and  other 
causes.  The  average  yearly  wage  in  Massachusetts  in  1913  in 
manufacturing  industries  gives  approximately  $10.95  a  week. 
Let  us  increase  this  average  weekly  to  $15  or  $20,  and  then  let 
us  ask  the  workers,  especially  those  with  children,  how  they 
would  find  it  possible  to  save  after  the  costs  of  ordinary  neces- 
saries of  living  have  been  met.  We  know  it  is  impossible  to 
save  much,  if  anything,  from  such  wages. 

To  flaunt  in  the  faces  of  those  who  have  reached  old  age 
without  means,  after  having  struggled  manfully  and  well 
through  long  years  of  painful  self-denial  in  which  they  have 
been  unable  to  save,  the  reproval,  "You  should  have  been 
thrifty,"  is  inhuman  mockery. 

Many  of  such  opponents  say  the  people  should  not  spend  so 
much  on  clothes,  shoes,  amusements,  cigars,  et  cetera.  Let  us 
analyze  this  and  see  what  would  happen  to  the  industry  and 
the  business  of  the  community  if  such  money  of  the  masses 
were  withdrawn  from  circulation  and  saved.  First,  we  would 


1917.]  HOUSE  —  No.  1850.  77 

meet  the  inevitable  proof  that  general  business  would  suffer, 
and  the  unemployment  of  the  people  who  now  depend  upon 
employment  in  this  general  business  would  consequently  result. 
This  condition  of  affairs  would  ultimately  reach  the  pockets  of 
the  very  men  who  now  advocate  this  false  economy  called 
thrift.  Second,  if  this  kind  of  thrift  were  practiced  we  would 
not  be  living  according  to  American  standards,  for  no  real 
American  standard  could  request,  little  less  demand,  that  a 
supposedly  free  people  live  so  penuriously  as  to  deny  them- 
selves the  necessary  pleasures  and  comforts  that  make  life 
worth  living  in  order  to  save  a  few  pennies  for  old  age. 

After  considering  the  opposition  of  the  objectors  who  dis- 
parage the  non-contributory  plan  of  pensions  because  they 
believe  it  will  discourage  thrift,  we  are  convinced  that  such 
objections  are  not  founded  upon  fact;  and  we  are  unwilling, 
therefore,  to  accept  any  stigmatic  suggestion  that  our  people, 
as  a  whole,  are  unthrifty.  We  know  they  often  practice  fru- 
gality to  a  painful  degree,  and  wTe  will  not  advocate  that  par- 
simony, which  is  unreasonable  and  excessive  saving  for  the  sake 
of  saving  at  the  expense  of  decent  living  conditions,  be  their 
practice.  Nor  do  we  believe  it  is  the  duty  of  the  citizen  to 
practice  that  miserliness  which  denies  one's  self  and  others  the 
ordinary  comforts,  and  even  the  necessaries,  of  life  for  the  mere 
sake  of  hoarding  money  for  old  age.  We  know  that  thousands 
of  our  people  must  of  necessity,  and  do,  practice  prudence  and 
providence  beyond  reason  and  justice  to  themselves.  It  is,  in 
fact,  an  ever-present  wisdom  obtained  from  the  sad  experience 
in  the  homes  of  the  masses.  The  advocates  of  pseudo-thrift 
who  advise  people  to  be  thrifty  on  small  wages  should  change 
their  term,  for  they  misunderstand  the  real  definition  and  sig- 
nificance of  the  word,  which  means  the  earning  and  saving  with 
a  view  to  wholesome  and  profitable  expenditure  at  a  proper 
time.  This  proper  time  is  incessantly  faced  by  the  toiler  whose 
weekly  wage  must  often  be  expended  upon  those  dependent 
upon  him  long  before  it  is  due,  leaving  him  nothing  to  save  for 
old  age.  Yet  every  dollar  thus  expended  promotes  the  industry 
and  the  business  of  the  Commonwealth.  In  this  way  is  paid 
90  per  cent,  if  not  all  of  the  taxes,  directly  and  indirectly, 
which  go  into  the  treasury  of  the  State. 


78  SOCIAL  INSURANCE.  [Feb. 

Will  any  one  believe  that  he  who  saves  selfishly  and  miserly 
for  his  own  protection  is  of  as  much  value  to  the  community  as 
he  who,  spending  as  he  goes,  even  extravagantly,  buys  of  the 
products  of  industry,  thus  contributing  to  the  prosperity  of 
all?  It  will  readily  be  seen  that  while  reckless  extravagance  is 
not  praiseworthy  it  is  of  greater  value  to  any  community  than 
the  practice  of  the  sordid  greed  of  niggardliness. 

To  show  that  thrift  has  not  decreased  in  the  United  Kingdom 
during  the  period  in  which  non-contributory  pensions  have  been 
in  operation,  we  quote  the  following  figures  from  the  sixty- 
second  statistical  abstract  of  the  United  Kingdom,  which  con- 
tains tables  showing  that  thrift  on  the  part  of  the  working 
classes  has  not  diminished  since  pensions  became  effective  in 
1909.  It  is  shown  in  this  report  that  during  the  period  of  six 
years  preceding  Dec.  31,  1908,  the  number  of  depositors'  ac- 
counts for  the  United  Kingdom  increased  to  1,885,090,  and  the 
amount  due  depositors  to  £16,043,126,  while  during  the  six 
years  following  1908  (year  of  pensions  law  enactment)  the 
number  of  depositors'  accounts  increased  to  2,496,563,  and  the 
amount  due  to  depositors  to  £29,884,994,  notwithstanding  that 
the  figures  for  the  year  ending  Dec.  31,  1914,  were  affected  by 
the  war. 

Here  is  a  very  notable  argument  to  repudiate  the  statement 
that  old-age  pensions  discourage  thrift. 

A  claim  is  also  made  that  "the  people  want  something  for 
nothing."  If  the  people  ever  have,  they  have  never  received 
it,  especially  in  the  caring  for  those  who  need  assistance  in 
old-age.  If  it  were  not  for  the  sadness  of  it,  it  would  be  hu- 
morous for  us  to  continue  working  along  the  lines  that  will 
insure  longevity,  and  then  refuse  to  protect  old  people  with 
pensions  so  that  they  may  enjoy  life  to  the  end  with  some 
measure  of  comfort. 

Much  fear  has  been  expressed  that  if  Massachusetts  were  to 
enact  a  pensions  law  residents  of  other  States  would  come  here 
and  take  up  residence  in  order  to  receive  its  immediate  benefits. 
This  would  be  impossible,  because  any  proposed  pensions  law 
should  stipulate  that  an  applicant  must  have  been  a  resident  of 
the  Commonwealth  for  a  term  of  years. 

A  phase  of  industrial  life  which  should  not  be  forgotten  in 


1917.]  HOUSE  —  No.  1850.  79 

relation  to  the  need  of  pensions  is  that  the  larger  number  of 
the  working  class  in  industry  to-day  is  facing  an  efficiency  test 
which  was  unknown  a  short  while  ago.  High  speed  and  intri- 
cate machinery  demand  from  these  workers  a  health-racking 
exactness  that  slowly  destroys  their  physical  stamina  and  well- 
being.  It  is  a  battle  between  the  endurance  powers  of  the 
human  and  the  high  speed  and  tremendous  strength  of  mar- 
velous contrivances  of  steel.  In  this  vitality-using  contest  the 
worker  loses  and  becomes  prematurely  old,  —  unfitted  to  per- 
form his  usual  tasks  at  a  much  earlier  period  of  life  than 
formerly. 

The  worker  must  alone  and  unfairly  bear  the  loss  of  his 
strength,  of  his  failing  eyesight,  of  his  physical  breakdown  from 
his  overtaxed  and  meager  earnings.  At  this  time  of  life  the 
earning  power  of  thousands  of  workers  becomes  lessened.  They 
are  no  longer  wanted  in  industry.  They  have  honestly  been 
unable  to  save  for  old  age,  and  in  middle  life  the  great  ma- 
jority of  them  feel  the  coming  of  the  baneful  prospects  of 
degrading  poverty.  This  is  also  true  of  thousands  of  workers 
in  offices  and  in  other  businesses.  Consequently,  it  has  come 
to  us,  in  the  course  of  our  investigation  to  protect  the  wage 
earner,  that  there  should  be  something  done  to  hold  such 
people  in  industry  who  are  passing  middle  life  and  are  no 
longer  able  to  meet  the  exacting  requirements  of  their  particular 
trade  or  work. 

We  recommend  that  employers,  labor  unions  and  others 
study  this  question  carefully,  and  devise  some  scheme  whereby 
such  workers  may  be  employed  in  other  departments  of  industry 
or  civil  business.  To  put  upon  the  worker  the  whole,  or  even 
a  partial,  burden  of  the  cost  due  to  his  physical  incapacity 
under  these  circumstances  is  inhuman.  This  burden  should  be 
borne  directly  by  the  profits  of  industry  that  were  made  from 
this  human  wreckage,  and  the  worker  should  be  protected  by 
some  form  of  invalidity  and  age  pensions  without  specific  con- 
tributions by  him.  To  test  these  observations  let  us  con- 
fidentially approach,  if  you  will,  this  type  of  citizen  fifty  years 
old,  gray,  not  as  active  as  before,  but,  withal,  a  good  citizen 
who  has  lived  with  his  family  according  to  American  standards, 
but  who  has  not  been  a  spendthrift.  Ask  him  if  he  has  been 


80  SOCIAL  INSURANCE.  [Feb. 

able  to  save  anything,  and  invariably  his  answer  will  be  no,  for 
family  expenses,  happenings  in  life  over  which  he  had  no  con- 
trol, have  taken  it  all.  Then  there  is  his  good  wife;  she  too 
has  been  unable  to  save.  If  this  husband  break  down  or  lose 
his  position,  both  are  but  a  few  weeks  from  need,  from  charity, 
or  perhaps  the  poorhouse,  unless  they  have  children  or  other 
relations  and  friends  who  can  help  them.  This  fear,  this  worry 
which  comes  to  thousands  of  our  people  is  more  destructive  of 
humanity  than  many  of  the  conditions  and  diseases  for  which 
we  annually  spend  thousands  of  dollars  to  prevent. 

A  few  years  ago  the  Commonwealth  enacted  a  law  "to 
provide  for  suitably  aiding  mothers  with  dependent  children," 
known  as  the  widows'  pension  law.  This  act,  like  all  other 
legislation  of  this  character,  is  of  the  non-contributory  type. 
When  it  was  proposed,  it  was  called  paternalistic  and  socialistic, 
and  was  considered  a  mad  attempt  to  make  citizens  provide  for 
the  support  of  widows  and  children  not  related  to  them.  The 
cost  of  maintaining  this  act  has  increased  enormously  over  the 
original  estimate,  yet  every  one  is  satisfied  that  it  is  a  good  law 
and  serves  a  great  purpose.  Many  of  those  who  opposed  it  in 
the  first  instance  are  now  agreed  that  it  has  proved  its  value. 

It  has  been  suggested  that  the  old-age  pension  is  a  Federal  and 
not  a  State  duty.  This  brings  back  the  time-worn  argument  of 
State  rights.  We  respect  its  moss-grown  antiquity,  but  we 
refuse  to  be  misled  by  such  subterfugean  Rip  Van  Winkleism. 
We  feel  it  would  be  much  more  economical  for  Massachusetts  to 
expend  her  own  money  within  the  Commonwealth  than  it  would 
for  her  to  pay  the  costs  under  a  Federal  law  in  which  she  would 
be  obliged  to  bear  in  part  a  heavy  burden  of  other  States  which 
have  not  an  equal  industrial  wealth.  It  could  be  argued  with 
equal  justification  that  workmen's  compensation  and  so-called 
widows'  pensions,  child  labor  and  the  restriction  of  hours  of 
labor,  are  purely  national  and  not  State  propositions,  yet  the 
Commonwealth  has  enacted  such  laws. 

There  is  already  a  system  of  contributory  pensions  in  opera- 
tion for  State  employees,  to  which  these  employees  and  the 
Commonwealth  contribute.  Even  here  the  masses  of  the  people 
are  paying  out  of  the  State's  treasury  towards  the  civil  pensions 
of  government  employees,  and  yet  they  themselves  are  un- 
provided for  in  old  age. 


1917.]  HOUSE  — No.  1850.  81 

Another  reason  for  our  advocacy  of  the  so-called  non-con- 
tributory old-age  pensions  system  for  our  people  is  that  we 
believe  it  will  be  found  to  be  constitutional. 

This  Commonwealth  has  already  expended  over  $35,000  in 
investigating  the  subject  of  old-age  pensions  covered  in  the 
reports  made  in  1910  and  1914,  and  to  this  is  to  be  added  the 
expense  of  this  Commission's  work  relating  to  the  subject.  For 
the  Commonwealth  to  spend  another  dollar  for  investigations 
of  any  kind  whatsoever  without  taking  definite  action  in 
establishing  an  old-age  pensions  system  would  be  little  less  than 
criminal  expenditure  of  the  people's  money.  It  is  now  time  for 
positive  action  in  behalf  of  this  great  problem,  and  the  people 
should  not  permit  themselves  to  be  humbugged  by  any  claim 
that  it  is  necessary  to  waste  more  time  or  more  money  in 
investigating  this  subject  which  has  already  been  sufficiently 
investigated. 

Against  the  critics  of  the  non-contributory  old-age  pensions 
system  we  place  the  following  letters  and  statements  from  emi- 
nent statesmen  who  know  how  the  non-contributory  old-age 
pensions  system  has  worked  in  their  respective  countries :  — 

Prime  Minister  Asquith,  Commons,  1911,  said:  - 

I  think  we  were  perfectly  right  not  to  adopt  the  principle  of  contribution 
in  regard  to  old-age  pensions,  because  I  am  satisfied  —  as  I  was  then  — 
that  a  system  of  old-age  pensions  based  upon  contribution  would  have  been 
futile  and  a  failure. 

Lloyd  George,  in  1912,  when  Chancellor  of  the  Exchequer 
said :  — 

After  the  first  year,  however,  the  popularity  and  success  of  that  measure 
(non-contributory  old-age  pensions)  was  so  firmly  assured  that  at  the  last 
general  election  the  worst  accusation  that  any  one  could  bring  against  a 
candidate  was  that  he  was  in  favor  of  tampering  with  that  first  great 
article  in  the  Magna  Charta  of  the  poor. 

A.  Bonar  Law,  now  Chancellor  of  the  Exchequer  of  England, 
says:  — 

The  old-age  pensions  scheme  has,  in  my  opinion,  been  very  successful 
and  beneficial.  I  am  sure  it  would  not  be  abandoned  here,  and  I  per- 
sonally strongly  approve  of  it. 


82  SOCIAL  INSURANCE.  [Feb. 

Arthur  Henderson,  formerly  chairman  of  the  Board  of  Edu- 
cation of  London,  and  now  a  member  of  the  British  Cabinet, 
sends  the  following:  — 

In  my  opinion  the  introduction  of  old-age  pensions  (non-contributory) 
has  been  of  the  greatest  benefit  to  the  working  people  of  this  country.  By 
relieving  large  numbers  from  the  fear  of  destitution  in  their  old  age  it  has 
increased  the  happiness  of  the  people  at  large.  For  this  reason  alone, 
apart  from  the  subsidiary  advantages,  such  as  the  strengthening  of  family 
ties  and  the  removal  of  the  much-dreaded  stigma  of  pauperism,  in  my 
opinion  it  has  been  thoroughly  worth  the  trial.  I  see  no  reason  to  suppose 
that  it  has  discouraged  thrift,  and  I  am  quite  sure  that  of  the  various  social 
reforms  which  have  been  introduced  in  the  last  ten  years  this  is  one  of  the 
last  which  our  people  would  allow  to  be  repealed. 

Phillip  Snowden,  M.P.,  had  this  to  say  in  1916:  - 

No  legislative  act  ever  passed  in  this  country  has  been  so  popular  as  the 
old-age  pensions  act.  One  never  hears  a  word  of  criticism  of  it,  and  those 
who  opposed  its  enactment  never  hint  at  opposition  to  it.  The  act  could 
not  be  repealed.  No  such  suggestion  has  been  made  from  any  quarter. 
No  parliamentary  candidate  would  ever  dream  of  suggesting  its  repeal. 
Mr.  Lloyd  George  has  never  repudiated  the  act.  It  has  been  the  greatest 
boon  ever  conferred  en  the  old  folks  in  this  country.  It  has  made  con- 
siderable economies  in  the  cost  of  the  poor-law  system,  as  old  people  can 
now  live  with  relatives  and  friends  who  formerly  had  to  go  inside  the 
poorhouse. 

From  John  Redmond,  M.P.,  comes  this  letter:  — 

Old-age  pensions  have  made  the  people  happier;  they  have  not  become 
thriftless  because  of  it;  and  it  has  been  a  great  boon,  not  only  to  old  people 
of  seventy  years  of  age  and  over,  but  also  to  their  families  and  to  the 
community  in  general. 

From  F.  Herbert  Stead,  M.A.,  of  London,  we  receive  the 
following:  — 

As  you  know,  the  position  I  have  occupied  and  occupy  has  enabled  me 
to  come  into  touch  with  the  old  people  most  recently  in  our  agitation  for 
national  old-age  homes  in  different  parts  of  the  country.  Everywhere 
there  seems  to  be  no  consciousness  or  even  a  hint  of  pauper  taint  attaching 
to  the  old-age  pensions. 

People  look  forward  with  hope  and  joy  to  the  time  when  they  shall 
receive  their  pension.  They  used  to  look  forward  with  horror  and  despair 


1917.]  HOUSE  — No.  1850.  83 

to  the  time  when  they  would  have  to  receive  poor-law  relief.  The  attempts 
of  a  very  small  minority,  who  were  "in  principle  opposed  to  old-age 
pensions,"  to  "crab"  and  disparage  pensions  and  regard  them  as  merely 
another  form  of  poor-law  relief  only  throw  into  stronger  relief  the  national 
unanimity  of  satisfaction  with  the  moral  as  well  as  the  social  relief  of 
old-age  pensions. 

Sydney  Webb,  widely  known  authority  and  writer  on  eco- 
nomic subjects  and  member  of  the  Fabian  Society  of  England, 
says:  — 

The  old-age  pensions  act  has  by  universal  testimony  been  an  unqualified 
success,  a  pure  gain  with  almost  no  drawbacks.  Fraud  has  been  very  small 
,(and  then  only  venial).  .  .  .  The  experience  of  New  Zealand  and  Aus- 
tralia has  been  the  same,  and  the  number  of  paupers  over  seventy  years 
has  been  enormously  reduced;  there  are  now  hardly  any  outdoor  paupers 
over  seventy,  whilst  of  the  indoor  paupers  there  remain  only  the  chron- 
ically sick  or  feeble-minded  or  incapable,  to  whom  the  workhouse  is  a 
home  of  rest. 

No  political  party  would  dare  to  suggest  repealing  the  act;  in  fact, 
no  one  has  ever  done  so. 

Arthur  M.  Myers,  Minister  of  Pensions  for  New  Zealand, 
wrote  on  July  24,  1916:- 

I  think  there  is  little  doubt  but  that  the  great  bulk  of  the  community 
is  satisfied  that  the  provision  made  by  Legislature  is  one  that  is  of  very 
great  benefit  to  that  section  of  the  people,  who,  through  force  of  circum- 
stances, in  their  old  age  are  dependent  upon  others  for  their  support. 

As  to  the  sentiment  of  the  people,  for  or  against  the  law,  and  the  possi- 
bility of  its  being  repealed,  I  think  I  am  safe  in  saying  that  there  are  no 
set  of  circumstances  that  I  can  conceive  where  a  demand  would  be  made 
for  denying  the  old  people  the  pension,  which  has  now  been  payable  since 
the  year  1898. 

F.  W.  Ross,  Assistant  Commissioner  of  Pensions  for  the  Com- 
monwealth of  Australia,  adds  his  approval  thusly:  — 

The  relief  extended  by  the  pensions  act  is  widely  appreciated,  and  the 
operation  of  the  act  has  given  general  satisfaction. 

To  these  opinions-  could  be  added  numbers  of  others,  but 
space  does  not  permit,  and  our  citizens  should  go  very  carefully 
before  decrying  the  efficiency  of  the  non-contributory  old-age 
pensions  system.  They  should  at  all  times,  when  they  desire 


84  SOCIAL  INSURANCE.  [Feb. 

such  laws,  instruct  their  representatives  and  senators  and  other 
officers  of  government  to  carry  out  tfyeir  expressed  wishes. 

When  Lloyd  George  and  former  Premier  Herbert  H.  Asquith 
and  other  able  men  of  the  United  Kingdom  were  advocating  the 
humanitarianism  of  old-age  pensions  every  conceivable  state- 
ment was  made  against  its  value  and  necessity,  —  statements 
similar  to  those  we  are  nowr  hearing  here,  and  among  them  is 
the  erroneous  claim  that  it  will  ruin  our  prosperity,  a  claim  that 
was  used  by  those  who  opposed  the  measure  in  England.  But 
practical  experience  in  Great  Britain  has  not  justified  the  claim, 
but  has  shown  distinctly  that  the  assumption  is  not  in  accord- 
ance with  fact. 

Lloyd  George,  in  his  second  budget  speech  in  1910,  testified 
to  the  fallacy  of  such  argument  in  these  words :  — 

It  looks  as  though  this  rich  and  powerful  Nation,  after  the  exceptional 
provisions  it  has  been  making  for  the  needy  and  unfortunate,  has  been 
blessed  with  greater  prosperity  than  it  has  ever  attained  in  the  whole 
history  of  its  commercial  greatness. 

This  expression  is  significant.  It  tells  us  tersely  that  Nations 
prosper  as  they  guard  and  care  for  the  children  of  God,  the 
children  of  men;  so  shall  we  prosper  as  we  care  for  and  protect 
our  people  in  their  old  age. 

In  arriving  at  these  conclusions  we  have  given  thought  to  all 
the  trivial  objections  against  non-contributory  old-age  pensions 
that  tended  to  belittle  the  wage  earners  —  the  great  industrial 
army  —  and  the  mothers  in  the  homes,  and  we  cast  them  aside 
as  erroneous  and  inane  as  compared  with  the  nobler  justice 
and  higher  humanitarian  aims  which  are  centered  in  the  pen- 
sions system  that  will  protect  our  people  from  the  want,  the 
degradation  and  the  shame  of  pauperism  in  old  age. 

We  ask,  what  imagination  can  conjure  a  fitting  emblem  for 
these  heroes  of  toil  who  have  been  touched  by  the  Master-hand, 
which  has  placed  upon  their  brows  the  wreath  of  courage  and 
valor,  —  a  courage  that  would  take  the  test  with  any  hero  of 
any  battle  line;  a  valor  born  in  these  God-fearing  toilers,  who 
love  their  families  and  heroically  sacrifice  all  for  them  in  the 
battle  of  life?  Can  a  mere  protection  of  a  non-contributory 
old-age  pensions  system  by  the  State  —  by  the  people  as  a 


1 917.]  HOUSE  —  No.  1850.         -  85 

vvhole  —  ever  be  a  compensating  reward  for  this  heroism,  this 
valor,  this  courage;  for  these  difficult,  and  at  times  heart- 
rending, struggles  against  great  odds  which  the  masses  of  the 
people  have  silently  and  uncomplainingly  borne  in  their  years 
of  great  contributions  to  the  development  and  prosperity  of 
this  Commonwealth? 

We  submit  for  your  consideration  a  compiled  old-age  and 
invalidity  pensions  act,  as  follows:  — 

Ax  ACT  TO  PROTECT  CITIZENS  OF  THE  COMMONWEALTH  FROM  WANT  IN 
OLD  AGE,  INVALIDITY  on  DISABILITY,  BY  RIGHT  OF  CITIZENSHIP; 
AND  TO  CONSERVE  AND  PROMOTE  THEIR  HEALTH,  HAPPINESS  AND 
PROSPERITY. 

PART  I.  —  OLD-AGE  PENSIONS. 

Statutory  Conditions. 

SECTION  1.  (1)  Every  person  (woman  or  man)  in  whose  case  the 
conditions  laid  down  by  this  act  for  the  receipt  of  an  old-age  pension 
(in  this  act  referred  to  as  statutory  conditions)  are  fulfilled,  shall  be 
entitled  to  receive  such  a  pension  under  this  act  so  long  as  those  con- 
ditions continue  to  be  fulfilled,  and  so  long  as  she  or  he  is  not  disqualified 
under  this  act  for  the  receipt  of  the  pension. 

(2)  An  old-age  pension  under  this  act  shall  be  at  the  rate  set  forth  in 
the  schedule  to  this  act,  section  thirteen. 

(3)  The  sums  required  for  the  purposes  of  this  act  or  its  administration 
shall  be  paid  out  of  moneys  provided  as  required  by  the  general  court 
from  taxes  from  intangible  personalty  (certain  stocks,  bonds,  etc.,  further 
described  in  the  tax  commissioner's  report,1  or  from  any  other  taxable 
property. 

(4)  The  receipt  of  an  old-age  pension  under  this  act  shall  not  deprive 
the  pensioner  of  any  franchise,  right,  or  privilege,  or  subject  her  or  him 
to  any  disability. 

SECTION  2.  The  statutory  conditions  for  the  receipt  of  an  old-age 
pension  are  • — 

(1)  The  person,  if  a  woman,  must  have  attained  the  age  of  sixty;  if  a 
man-,  must  have  attained  the  age  of  sixty-five. 

(2)  A  person  shall  be  deemed  to  have  attained  the  age  of  sixty  or  sixty- 
five  on  the  commencement  of  the  day  previous  to  the  sixtieth  or  sixty- 
fifth  anniversary,  as  the  case  may  be,  of  the  day  of  her  or  his  birth. 

(3)  The  person  must  satisfy  the  pension  authorities  that  for  at  least 
twenty  years  up  to  the  date  of  the  receipt  of  any  sum  on  account  of  a 
pension  she  or  he  has  been  a  citizen  of  the  commonwealth,  and  that 
for'at  least  fifteen  years  in  the  aggregate  up  to  the  date  of  the  receipt  of 

i  House  2290,  1913. 


86  SOCIAL  INSURANCE.  [Feb. 

any  sum  on  account  of  a  pension  she  or  he  has  had  her  or  his  residence 
in  the  commonwealth:  provided,  that  for  the  purpose  of  computing  the 
fifteen  years'  residence  in  the  commonwealth  under  this  provision  — 

(a)^  Any  period  spend  abroad  in  any  service  of  the  United  States,  the 
remuneration  for  which  is  paid  out  of  moneys  provided  by  the  national 
government,  or  as  the  wife  or  servant  of  a  person  in  any  such  service 
so  remunerated;  and 

(6)  Any  periods  spent  abroad  by  any  person  during  which  that  person 
has  maintained  or  assisted  in  maintaining  any  dependent  in  the  com- 
monwealth; and 

fc)  Any  period  of  temporary  absence  not  exceeding  three  months  in 
duration  at  any  one  time  —  shall  be  counted  as  residence  in  the  com- 
monwealth. 

(4)  The  condition  as  to  nationality  imposed  by  paragraph  three  of 
this  section  two  shall  not  be  required  to  be  fulfilled  in  the  case  of  a  woman 
who  satisfies  the  pension  authorities  that  she  would,  but  for  her  marriage 
with  an  alien,  have  fulfilled  the  condition,  and  that,  at  the  date  of  a 
receipt  of  any  sum  on   account  of  a  pension,  the  alien  is  dead,  or 
the  marriage  with  the  alien  has  been  dissolved  or  annulled,  or  she  has, 
for  a  period  of  not  less  than  two  years  up  to  the  said  date,  been  legally 
separated  from,  or  deserted  by,  the  alien. 

(5)  The  person  must  satisfy  the  pension  authorities  that  her  or  his 
yearly  means  as  calculated  under  this  act  do  not  exceed  three  hundred 
and  sixteen  dollars. 

Disqualifications . 

SECTION  3.  (1)  A  person  shall.be  disqualified  for  receiving  or  con- 
tinuing to  receive  an  old-age  pension  under  this  act,  notwithstanding  the 
fulfillment  of  the  statutory  conditions  — 

(a)  While  she  or  he  is  in  receipt  of  any  poor  relief  (other  than  relief 
excepted  under  this  provision),  and  until  the  first  day  of  July,  nineteen 
hundred  and  eighteen,  unless  the  general  court  otherwise  determines,  if 
she  or  he  has  at  any  time  since  the  first  day  of  January,  nineteen  hundred 
and  seventeen,  received  or  hereafter  receives,  any  such  relief:  provided, 
that  for  the  purposes  of  this  provision  — 

Any  medical  or  surgical  assistance  (including  food  or  comforts)  supplied 
by  or  on  the  recommendation  of  a  medical  officer;  or 

Any  relief  given  to  any  person  by  means  of  the  maintenance  of  any 
dependent  of  that  person  in  any  lunatic  asylum,,  infirmary  or  hospital, 
or  the  payment  of  any  expenses  of  the  burial  of  a  dependent;  or 

Any  relief  (other  than  medical  or  surgical  assistance,  or  relief  herein- 
before specifically  exempted)  which  by  law  is  expressly  declared  not  to 
be  a  disqualification  or  a  reason  for  depriving  any  person  of  any  franchise, 
right,  or  privilege  —  shall  not  be  considered  as  poor  relief. 

(6)  If,  before  she  or  he  becomes  entitled  to  a  pension,  she  or  he  has 
habitually  failed  to  work  according  to  her  or  his  ability,  opportunity, 


1917.]  HOUSE  — No.  1850.  87 

and  need,  for  the  maintenance  or  benefit  of  herself  or  himself  and  those 
legally  dependent  upon  her  or  him:  provided,  that  a  person  shall  not  be 
disqualified  under  this  paragraph  if  such  person  has  continuously  for 
ten  years  up  to  the  attaining  of  the  age  of  fifty,  if  a  woman,  or  fifty-five, 
if  a  man,  by  means  of  payments  to  any  corporation,  society  or  trade 
unions,  or  other  approved  steps,  made  such  provision  against  old  age, 
sickness,  infirmity,  or  want  from  loss  of  employment  as  may  be  recognized 
as  proper  provisions  for  the  purpose  by  regulations  under  this  act;  and 
any  such  provision,  when  made  by  the  husband  in  the  case  of  a  married 
couple  living  together,  shall  as  respects  any  right  of  the  wife  to  a  pension, 
be  treated  as  provision  made  by  the  wife  as  well  as  by  the  husband. 

(c)  While  she  or  he  is  detained  in  any  asylum  of  the  commonwealth's, 
or  while  she  or  he  is  being  maintained  in  any  place  as  a  needy  poor  or 
criminal  lunatic. 

(d)  During  the  continuance  of  any  period  of  disqualification  arising 
or  imposed  in  pursuance  of  this  section  in  consequence  of  conviction  for 
an  offence. 

(e)  Any  rule  of  law  and  any  enactment,  the  effect  of  which  is  to  cause 
relief  given  to  or  in  respect  of  a  wife  or  relative  to  be  treated  as  relief 
given  to  the  person  liable  to  maintain  the  wife  or  relative,  shall  not  have 
effect  for  the  purpose  of  this  section. 

(2)  Where  a  person  has  been,  before  the  passing  of  this  act,  or  is, 
after  the  passing  of  this  act,  convicted  of  any  offence,  and  ordered  to  be 
imprisoned  without  the  option  of  a  fine  or  to  suffer  any  greater  punish- 
ment, she  or  he  shall  be  disqualified  for  receiving  or  continuing  to  receive 
an  old-age  pension  under  this  act  while  she  or  he  is  detained  in  prison  in 
consequence  of  the  order,  and  for  a  further  period,  not  exceeding  three 
years,  after  the  date  on  which  she  or  he  is  released  from  prison,  if  the 
court  so  directs:  provided,  however,  that  in  cases  where  the  term  by  which 
a  person  has  been  ordered  to  be  imprisoned  without  the  option  of  a  fine 
does  not  exceed  six  weeks,  one  year  shall  be  substituted  for  three  years 
as  the  further  maximum  period  of  disqualification. 

(3)  Where  a  person,  woman  of  sixty  or  upwards,  or  a  man  of  sixty-five 
years  of  age  or  upwards,  having  been  convicted  or  committed  before  any 
court  is  liable  to  have  a  detention  or  commitment  order  made  against 
her  or  him  as  one  needing  medical  or  other  attention  or  examination, 
and  is  not  necessarily,  by  virtue  of  the  provisions  of  this  act,  disqualified 
for  receiving  or  continuing  to  receive  an  old-age  pension  under  this  act, 
the  court  may,  if  it  thinks  fit,  order  that  the  person  convicted  be  so  dis- 
qualified for  such  period,  not  exceeding  three  years,  as  the  court  directs. 

(4)  Any  person  in  receipt  of  an  old-age  pension  who  is  convicted  as  an 
inebriate  shall  be  disqualified  for  receiving  or  continuing  to  receive  an 
old-age  pension  for  a  period  of  three  months  after  the  date  of  her  or  his 
conviction,  unless  the  court  before  whom  she  or  he  is  convicted  directs 
to  the  contrary. 


88  SOCIAL  INSURANCE.  [Feb. 


Calculation  of  Means. 

SECTION  4.  (1)  In  calculating  the  means  of  a  person  for  the  purpose 
of  this  act  account  shall  be  taken  of  — • 

(a)  The  yearly  value  of  any  property  (not  being  property  personally 
used  by  her  or  him)  which  is  invested,  or  otherwise  put  to  profitable  use, 
by  her  or  him,  or  which,  though  capable  of  investment  or  profitable  use, 
is  not  so  invested  or  put  to  profitable  use  by  her  or  him,  the  yearly  value 
of  that  property  being  taken  to  be  one-twentieth  part  of  the  capital 
value  thereof. 

(6)  The  income  which  that  person  may  reasonably  receive  during  the 
succeeding  year  in  cash,  excluding  any  sums  receivable  on  account  of  an 
old-age  pension  under  this  act  and  excluding  any  sums  arising  from  the 
investment  or  profitable  use  of  property  (not  being  personally  used  or 
enjoyed  by  her  or  him),  that  income,  in  the  absence  of  other  means  for 
ascertaining  the  income,  being  taken  to  be  the  income  actually  received 
during  the  preceding  year. 

(c)  The  yearly  value  of  any  advantage  accruing  to  that  person  from 
the  use  or  enjoyment  of  any  property,  or  of  a  life  interest  or  annuity,  be- 
longing to  her  or  him  which  is  personally  used  or  enjoyed  by  her  or  him, 
except  furniture  and  personal  effects  in  a  case  where  the  total  value  of 
the  furniture  and  effects  does  not  exceed  three  hundred  and  fifty  dollars, 
the  yearly  value  of  that  property  being  taken  to  be  one-twentieth  part 
of  the  capital  value  thereof. 

(d)  The  yearly  value  of  any  benefit  or  privilege  enjoyed  by  that  person, 
except  board  and  lodging  voluntarily  allowed  by  relatives:  provided,  that 
where  under  paragraphs  (a)  and  (c)  of  this  section  the  yearly  value  of  any 
property  is  taken  to  be  one-twentieth  part  of  the  capital  value  thereof, 
no  account  shall  be  taken  under  any  other  of  those  provisions  of  any 
appropriation  of  that  property  for  the  purpose  of  current  expenditure. 

(2)  In  calculating  the  means  of  a  person  being  one  of  a  married  couple 
living  together  in  the  same  house,  the  means  shall  be  taken  to  be  half 
the  total  means  of  the  couple. 

(3)  If  it  appears  that  any  person  has  directly  or  indirectly  deprived 
herself  or  himself  of  any  income  or  property  in  order  to  qualify  herself  or 
himself  for  the  receipt  of  a  pension,  or  for  the  receipt  of  an  old-age  pension 
at  a  higher  rate  than  that  to  which  she  or  he  would  otherwise  be  entitled 
under  this  act,  that  income  or  the  yearly  value  of  that  property  shall, 
for  the  purposes  of  this  section,  be  taken  to  be  part  of  the  means  of  that 
person. 

Time  of  Payment. 

SECTION  5.  (1)  An  old-age  pension  under  this  act,  subject  to  any 
directions  of  the  commissioner  and  of  the  treasurer  of  the  commonwealth 
in  special  cases,  shall  be  paid  weekly  in  advance  in  such  manner  and 
subject  to  such  conditions,  as  to  identification  or  otherwise,  as  the  treas- 
urer and  the  commissioner  direct. 


1917.] 


HOUSE  —  No.  1850. 


89 


(2)  A  pension  shall  commence  to  accrue  on  the  first  Friday  after  the 
claim  for  a  pension  has  been  allowed,  or,  in  the  case  of  a  claim  provision- 
ally allowed,  on  the  first  Friday  after  the  day  on  which  the  claimant 
becomes  entitled  to  receive  the  pension. 

(3)  After  the  first  day  of  March,  nineteen  hundred  and  eighteen,  the 
central  pension  authority  shall,  if  the  facts  warrant,  date  a  pension  back 
to,  but  not  beyond,  the  date  of  claim,  application  or  question  of  a  person. 

(4)  A  sum  shall  not  be  paid  on  account  of  an  old-age  pension  — 
(a)  To  any  person  while  absent  from  the  commonwealth;   or 

(6)  If  payment  of  the  sum  is  not  obtained  within  three  months  after 
date  of  which  it  has  become  payable. 


Non-assignment. 

SECTION  6.  Every  assignment  of  or  charge  on,  and  every  agreement 
to  assign  or  charge,  an  old-age  pension  under  this  act  shall  be  void,  and, 
on  the  bankruptcy  of  a  person  entitled  to  an  old-age  pension,  the  pension 
shall  not  pass  to  any  trustee  or  other  person  acting  on  behalf  of  the 
creditors. 

Claims  for  Pensions. 

SECTION  7.  (1)  All  claims  for  old-age  pensions  under  this  act,  and 
all  questions  whether  the  statutory  conditions  are  fulfilled  in  the  case 
.of  any  person  claiming  such  a  pension,  or  whether  those  conditions  con- 
tinue to  be  fulfilled  in  the  case  of  a  person  in  receipt  of  such  a  pension,  or 
whether  a  person  is  disqualified  for  receiving  or  continuing  to  receive  a 
pension,  shall  be  considered  and  determined  as  follows:  — 

(a)  Any  such  claim  shall  stand  referred  to  the  local  pension  com- 
mittee, and  the  committee  shall  (except  in  the  case  of  a  question  which 
has  been  originated  by  the  pension  officer,  and  on  which  the  committee 
had  already  his  report),  before  considering  the  claim  or  question,  refer 
it  for  report  and  inquiry  to  the  pension  officer. 

(6)  The  pension  officer  shall  inquire  into  and  report  upon  any  question 
or  claim  so  referred  to  him,  and  the  local  pension  committee  shall,  on 
the  receipt  of  the  report  of  pension  officer,  and  after  obtaining  from  him 
or  from  any  other  source  if  necessary  any  further  information  as  to  claim 
or  question,  consider  the  case  and  give  their  decision  upon  the  claim  or 
question. 

(c)  The  pension  officer  or  any  person  aggrieved  may  appeal  to  the 
central  pension  authority  against  the  decision  of  the  local  pension  com- 
mittee allowing  or  refusing  a  claim  for  pension  or  determining  any  questioja 
referred  to  them  within  the  time  and  in  the  manner  prescribed  by  regula- 
tions under  this  act,  and  any  claim  or  question  in  respect  of  which  an 
appeal  is  so  brought  shall  stand  referred  to  the  central  pension  authority, 
and  shall  be  considered  and  determined  by  such  authority. 

(d)  If  any  person  is  aggrieved  by  the  refusal  or  neglect  of  a  local  pension 
committee  to  consider  a  claim  for  a  pension,  or  to  determine  any  question 


90  SOCIAL  INSURANCE.  [Feb. 

referred  to  them,  that  person  may  apply  in  the  prescribed  manner  to  the 
central  pension  authority,  and  that  authority  may,  if  it  considers  that 
the  local  pension  committee  have  refused  or  neglected  to  consider  and 
determine  the  claim  or  question  within  a  reasonable  time,  consider  and 
determine  the  claim  or  question  in  the  same  manner  as  on  an  appeal 
from  the  decision  from  the  local  pension  committee. 

(2)  The  decision  of  the  local  pension. committee  on  any  claim  or  ques- 
tion which  is  not  referred  to  the  central  pension  authority,  and  the  de- 
cision of  the  central  pension  authority  on  any  claim  or  question  which  is 
so  referred  to  them,  shall  be  final  and  conclusive. 


Pension  Authorities. 

SECTION  8.  (1)  The  local  pension  committee  shall  be  a  committee 
appointed  for  every  county  from  the  citizens  of  such  county. 

(2)  A  local  pension  committee  may  appoint  such  and  so  many  sub- 
committees, consisting  either  wholly  or  partly  of  the  members  of  the 
committee,  as  the  committee  think  fit,  and  a  local  pension  committee 
may  delegate,  either  absolutely  or  under  such  conditions  as  they  see  fit, 
to  any  such  subcommittee  any  powers  and  duties  of  the  local  pension 
committee  under  this  act. 

(3)  The  central  pension  authority  shall  be  the  insurance  commissioner 
of  the  commonwealth,  and  the  commissioner  may  act  through  any  such 
committee,  persons,  or  person  appointed  by  him,  with  the  consent  of  the 
governor  and  council,  as  he  thinks  fit. 

(4)  Any  reference  in  this  act  to  pension  authorities  shall  be  construed 
as  a  reference  to  the  pension  officer,  the  local  pension  committee,  and  the 
central  pension  authority,  or  to  any  one  of  them,  as  the  case  requires. 

False  Representation. 

SECTION  9.  (1)  If,  for  the  purpose  of  obtaining  or  continuing  an  old- 
age  pension  under  this  act,  either  for  herself  or  himself  or  for  any  other 
person,  or  for  the  purpose  of  obtaining  or  continuing  an  old-age  pension 
under  this  act  for  herself  or  himself  or  for  any  other  person  at  a  higher 
rate  than  that  appropriate  to  the  case,  any  person  knowingly  makes  a 
false  statement  or  false  representation,  she  or  he  shall  be  liable  on  con- 
viction to  imprisonment  for  a  term  not  exceeding  six  months. 

(a)  Any  court  shall,  however,  have  the  power,  in  the  case  of  a  person 
convicted  of  an  offence  under  subsection  (1)  of  this  section,  to  impose  a 
fine  not  exceeding  one  hundred  dollars  instead  of  imprisonment,  if  it 
thinks  that  the  justice  of  the  case  would  be  better  met  by  a  fine  than  by 
imprisonment. 

(2)  If  it  is  found  at  any  time  that  a  person  has  been  in  receipt  of  an 
old-age  pension  under  this  act  while  the  statutory  conditions  were  not 
fulfilled  in  her  or  his  case,  or  while  she  or  he  was  disqualified  for  receiving 


1917.]  HOUSE  — No.  1850.  91 

the  pension,  she  or  he,  or,  in  the  case  of  her  or  his  death,  her  or  his  personal 
representative  (if  such  personal  representative  becomes  entitled  to  any 
sum  or  sums  as  a  personal  representative),  shall  be  liable  to  repay  to  the 
treasurer  of  the  commonwealth  any  sums  paid  to  her  or  him  in  respect  of 
the  pension  while  the  statutory  conditions  were  not  fulfilled,  or  while 
she  or  he  was  disqualified  for  receiving  the  pension,  and  the  amount  of 
those  sums  may  be  recovered  as  a  debt  due  the  commonwealth.  This 
section  shall  also  apply,  with  necessary  modifications,  to  cases  where  an 
old-age  pension  is  received  at  a  higher  rate  than  that  appropriate  to  the 
case,  as  it  applies  to  cases  where  a  person  has  been  in  receipt  of  an  old- 
age  pension  while  the  statutory  conditions  were  not  fulfilled. 

(a)  Any  decision  of  the  local  pension  committee  under  section  seven 
on  any  question  which  is  not  referred  to  the  central  pension  authority, 
and  the  decision  of  the  central  pension  authority  on  any  question  which 
is  referred  to  them  under  that  section,  shall  be  conclusive  proof  of  any 
matters  decided  by  the  committee  or  the  authority. 

(6)  A  copy  of  a  decision  of  the  local  pension  committee  or  central 
pension  authority,  if  authenticated  in  manner  provided  by  regulations 
to  be  made  for  the  purpose  under  section  eleven,  shall  be  received  in 
evidence. 

(3)  Where  any  person  who  is  in  receipt  of  an  old-age  pension  is  liable 
to  repay  to  the  treasurer  of  the  commonwealth  any  sums  under  this 
section  in  consequence  of  the  finding  of  a  local  pension  committee,  or  of 
the  central  pension  authority  in  the  case  of  a  question  referred  to  them, 
the  treasurer  shall  be  entitled,  without  prejudice  to  his  powers  under  sub- 
section (2)  of  this  section,  to  direct  the  deduction  of  those  sums  from 
any  sums  to  which  that  person  becomes  entitled  on  account  of  an  old- 
age  pension,  in  manner  to  be  provided  by  regulations  to  be  made  for  the 
purpose  under  section  eleven  of  this  act. 


Questions  as  to  Pension  Rate. 

SECTION  10.  (1)  It  is  hereby  declared  that  a  question  may  be  raised 
at  any  time  as  to  — 

(a)  Whether  at  any  time  or  during  any  period  a  person  has  been  in 
receipt  of  an  old-age  pension  when  the  statutory  conditions  were  not 
fulfilled,  or  when  he  was  disqualified  for  receiving  the  pension;  and 

(6)  Whether  a  person  has  been  at  any  time  or  during  any  period  in 
receipt  of  a  pension  at  a  certain  rate  when  his  means  exceeded  the  amount 
which  justified  the  payment  of  a  pension  at  that  rate,  and,  if  so,  at  what 
rate  the  pension,  if  any,  should  have  been  paid;  and 

(c)  Whether  a  person  who  is  in  receipt  of  a  pension  at  a  certain  rate  is, 
having  regard  to  his  means,  entitled  to  a  pension  at  a  higher  or  a  lower 
rate,  and,  if  so,  at  what  rate  the  pension,  if  any,  should  be  paid; 
and  that  an  application  may  be  made  at  any  time  to  alter  or  revoke  a 
provisional  allowance  of  a  claim  for  a  pension. 


92  SOCIAL  INSURANCE.  [Feb. 

(2)  Section  seven  of  this  act  shall  apply  to  any  such  question  or  appli- 
cation as  it  applies  to  the  questions  mentioned  in  that  section. 

(3)  Any  such  question  may  be  raised  notwithstanding  that  the  de- 
cision of  the  question  involves  a  decision  of  the  local  pension  committee 
or  central  pension  authority,  as  the  case  may  be;   But  where  by  a  later 
decision  a  former  decision  is  reversed,  a  person  who  has  received  any 
sums  on  account  of  an  old-age  pension  in  accordance  with  the  former 
decision  shall,  notwithstanding  anything  in  subsection   (2)   of  section 
nine,  in  the  absence  of  any  fraud  on  his  part,  be  entitled  to  retain  any 
sum  so  received  up  to  the  date  of  the  later  decision  which  he  would  have 
been  entitled  to  retain  but  for  the  reversal  of  the  former  decision. 

(4)  Where  a  question  is  raised  as  to  the  disqualifications  of  a  person 
to  receive  an  old-age  pension,  and  it  is  alleged  that  the  disqualification 
has  arisen  since  the  person  has  been  in  receipt  of  the  pension,  and  that 
the  disqualification  is  continuing  at  the  time  the  question  is  raised,  or, 
if  it  has  ceased,  has  ceased  less  than  three  weeks  before  that  time,  the 
payment  of  the  pension  shall  be  discontinued,  and  no  sum  shall  be  paid 
to  the  pensioner  on  account  of  the  pension  after  the  date  on  which  the 
question  is  raised:   provided,  that  if  the  question  is  decided  in  favor  of 
the  pensioner  she  or  he  shall  be  entitled  to  receive  all  sums  which  would 
have  been  payable  to  her  or  him  if  the  question  had  not  been  raised. 

(5)  If  the  decision  on  any  question  involves  the  discontinuance  of  an 
old-age  pension,  or  the  reduction  of  the  rate  at  which  the  pension  is 
paid,  or  if,  in  a  case  where  the  payment  of  the  pension  has  been  dis- 
continued on  the  raising  of  the  question,  the  question  is  not  decided  in 
favor  of  the  pensioner,  the  person  in  respect  of  whose  pension  the  decision 
is  given  shall  not  be  entitled  to  receive  a  pension  or  to  receive  a  pension 
at  a  rate  higher  than  that  determined  by  the  committee  or  authority,  as 
the  case  may  be,  notwithstanding  any  change  of  circumstances,  unless 
she  or  he  makes  a  fresh  claim  for  the  purpose  and  the  claim  is  allowed,  or, 
in  a  case  where  she  or  he  alleges  that  she  or  he  is  entitled  to  receive  a 
pension  at  a  higher  rate,  raises  a  question  for  the  purpose  and  the  pen- 
sion is  allowed  at  a  higher  rate. 

Administration,  Rides  and  Regulations. 

SECTION  11.  (1)  The  governor  and  council,  in  conjunction  with  the 
insurance  commissioner  (central  pension  authority),  may  make  regula- 
tions as  needed  for  carrying  this  act  into  effect,  and  in  particular  — 

(a)  For  prescribing  the  evidence  to  be  required  as  to  the  fulfillment 
of  statutory  conditions;  and 

(6)  For  prescribing  the  manner  in  which  claims  to  pensions  may  be 
made  and  where  paid,  and  the  procedure  to  be  followed  on  the  con- 
sideration and  determination  of  claims  and  questions  to  be  considered 
and  determined  by  pension  officers  and  local  pension  committees,  or  by 
the  central  pension  authority,  and  the  mode  in  which  any  pension  may 


1917.]  HOUSE  —  Xo.  1850.  93 

be  raised  as  to  continuance,  in  the  case  of  a  pensioner,  of  the  fulfillment 
of  the  statutory  conditions,  and  as  to  the  disqualifications  of  a  pensioner; 
and 

(c)  As  to  the  appointment  of,  number,  quorum,  term  of  office,  and 
proceedings  generally  of  the  local  pension  committee,  and  the  appoint- 
ment of  pension  officers,  and  the  use  by  the  committee,  with  or  without 
payment,  of  any  offices,  and  the  provision  to  be  made  for  the  immediate 
payment  of  any  expenses  of  the  committee,  pension  officers,  or  other 
details  necessary  to  carry  out  the  provisions  of  this  act,  and  which  are 
ultimately  to  be  paid  by  the  commonwealth. 

(2)  The  regulations  shall  provide  for  enabling  claimants  to  obtain  in- 
formation as  respects  old-age  pensions  under  this  act  through  city  or 
town  clerks;    and  for  provisionally  allowing  claims  to  pensions  before 
the  date  on  which  the  claimant  will  become  actually  entitled  to  a  pension ; 
and  for  notice  being  given  by  registrars  of  births  and  deaths  to  the  pen- 
sion officers  or  local  pension  committees  of  every  death  of  a  woman  over 
sixty  and  of  a  man  over  sixty-five  registered  by  them,  in  such  manner 
and  subject  to  such  conditions  as  may  be  laid  down  by  the  regulations; 
and  for  making  the  procedure  for  considering  and  determining  on  any 
claim  for  a  pension  or  question  with  respect  to  an  old-age  pension  under 
this  act  as  simple  as  possible. 

(3)  Any  expenses  incurred  by  the  insurance  commissioner  or  in  carry- 
ing this  act  into  effect  shall  be  defrayed  out  of  the  monej^s  provided  by 
the  general  court. 

When  entitled  to  Pension. 

SECTION  12.  (1)  A  person  shall  not  be  entitled  to  the  receipt  of  a 
pension  under  this  act  until  the  first  day  of  January,  nineteen  hundred 
and  eighteen,  and  no  such  pension  shall  begin  to  accrue  until  that  day. 

(2)  This  act  may  be  cited  as  the  Old-age  and  Invalidity  Pension  Act 
of  1917. 

Pension  Rate. 
SECTION7  13.     Schedule:' — 


MEANS  OF  PENSIONER. 

Rate  of 
Pension  per 
Week. 

Where  the  yearly  means  of  the  pensioner  as  calculated  under  this  act  — 
Do  not  exceed  $212     

$2  50 

Exceed  $212,  but  do  not  exceed  $238,         

2  00 

Exceed  $238,  but  do  not  exceed  S264,         
Exceed  $264,  but  do  not  exceed  $290  

1  50 
1  00 

Exceed  $290,  but  do  not  exceed  $316  
Exceed  $316,        . 

50 
No  pension 

94  SOCIAL  INSURANCE.  [Feb. 

PART  II.  —  INVALID  PENSIONS. 

Condition. 

SECTION  14.  (1)  Subject  to  this  act,  every  person  above  the  age  of 
twenty  years,  who  is  permanently  incapacitated  for  work  by  reason  of 
an  accident  or  by  reason  of  his  being  an  invalid,  and  who  is  not  receiv- 
ing an  old-age  pension,  shall,  while  in  this  commonwealth,  be  qualified 
to  receive  an  invalid  pension. 

(2)  Subject  to  this  act,  every  permanently  blind  person  above  the 
age  of  twenty  years  who  is  not  qualified  under  subsection  (2)  of  this 
section  to  receive  an  invalid  pension,  and  who  is  not  receiving  an  old- 
age  pension,  shall,  while  in  this  commonwealth,  be  qualified  to  receive 
an  invalid  pension. 

(3)  Aliens  shall  not  be  qualified  to  receive  an  invalid  pension. 

(4)  No  person  shall  receive  an  invalid  pension  unless  — 

(a)  She  or  he  is  residing  in  the  commonwealth  on  the  date  when  she 
or  he  makes  her  or  his  claim  to  the  pension. 

(6)  She  or  he  has  on  that  date  resided  in  the  commonwealth  con- 
tinuously for  at  least  twenty  years. 

(c)  She  or  he  has,  while  in  this  commonwealth,  become  permanently 
incapacitated  or  blind. 

(d)  The  accident  or  invalid  state  of  health  was  not  self-induced,  nor 
in  any  way  brought  about  with  a  view  to  obtaining  a  pension. 

(e)  She  or  he  has  no  claim  against  any  employer,  company,  corporation, 
or  other  person,  or  body,  compellable  under  private  contract  or  law  to 
adequately  maintain  or  compensate  him  on  account  of  accident  or  in- 
valid state  of  health. 

(/)  Her  or  his  relatives,  namely,  father,  mother,  husband,  wife,  or 
children  do  not,  individually  or  collectively,  adequately  maintain  her  or 
him. 

(5)  For  the  purpose  of  an  invalid  pension,  a  person  who  is  afflicted 
with  a  congenital  defect,  and  who  is  rendered  permanently  incapacitated 
or  blind  thereby,  shall  be  regarded  as  having  become  permanently  in- 
capacitated or  blind  while  in  the  commonwealth  if  she  or  he  was  brought 
into  the  commonwealth  before  attaining  the  age  of  three  years. 


Amount  of  Pension. 

SECTION  15.  (1)  The  amount  of  an  invalid  pension  shall  in  every 
case  be  determined  by  the  schedule  of  means  and  pension  amount  allowed 
thereunder  in  section  thirteen  of  this  act,  but  the  pension  authorities 
shall  determine  each  amount  of  pension,  having  regard  to  any  contribu- 
tion made  to  her  or  his  maintenance,  and  having  regard  to  her  or  his 
having  received  compensation  from  any  source  in  respect  of  any  injury. 

(2)  The  pension  authorities  shall  in  the  case  of  invalidity,  and  also 
in  the  case  of  accident  where  the  permanent  incapacity  for  work  is  not 


1917.]  HOUSE  —  No.  1850.  95 

manifest,  direct  an  examination  of  the  claimant  to  be  made  by  a  duly 
qualified  medical  practitioner,  who  shall  certify  whether  in  his  opinion 
the  claimant  is  permanently  incapacitated  for  work,  and  shall  state  the 
grounds  upon  which  his  opinion  is  founded:  provided,  that  the  examina- 
tion may  be  dispensed  with  if  the  claimant  resides  in  a  place  remote 
from  any  duly  qualified  medical  practitioner,  or,  where  medical  testi- 
mony conflicts,  the  pension  authorities  shall  have  the  power  to  decide 
the  application. 

PART  III.  —  PUBLIC  TRUSTEE. 

SECTION  16.  (1)  Where  any  person  who  otherwise  would  be  entitled 
to  a  pension  under  this  act  is  the  owner  of  the  property  on  which  she  or 
he  resides,  she  or  he  may  convey  or  transfer  the  same  to  the  central 
pension  authority,  who  shall  hold  the  same  as  a  public  trustee,  and  who 
shall  deal  with  such  property  as  directed  by  the  rules  and  regulations  to 
be  made  for  such  purposes  under  section  eleven  of  this  act,  and  all  pro- 
visions of  this  act,  where  applicable,  shall  apply  to  this  section  and  such 
property  or  pension  as  shall  come  under  this  section. 

(2)  The  property  so  conveyed  or  transferred  shall  not  be  deemed  to 
form  part  of  the  accumulated  property  of  the  pensioner  for  the  purposes 
of  this  act. 

(3)  The  pension  authorities  shall  permit  the  pensioner  or  pensioners  to 
reside  on  the  property  rent  free  during  life,  and  if  the  pensioner  dies 
leaving  a  wife  or  husband  who  is  also  entitled  to  a  pension,  the  survivor 
shall  be  entitled  so  to  reside  on  the  said  property  for  life. 

(4)  While  the  pensioner  or  survivor  aforesaid  so  resides  she  or  he 
shall  maintain  the  premises  in  good  and  substantial  repair,  and  shall  pay 
all  taxes  and  other  rates  payable  thereon.     ' 

(5)  On  the  death  of  the  pensioner  or  of  the  survivor  aforesaid,  or  where 
from  any  cause  the  pensioner  is  no  longer  entitled  to  a  pension,  the  central 
pension  authority  shall  sell  the  property,  and  out  of  the  proceeds  thereof 
shall  (after  deducting  the  commission  payable,  to  be  defined  under  section 
eleven  of  this  act)  refund  to  the  treasurer  of  the  commonwealth  so  much 
of  the  pension  paid  to  such  pensioner  or  pensioners  since  the  date  of  the 
conveyance  or  transfer  as  but  for  the  operation  of  this  section  would 
not  have  been  payable,  together  with  interest  thereon  at  the  rate  of 
four  per  centum  per  annum,  and  shall  pay  the  balance,  if  any,  to  the 
person  or  persons  entitled  thereto:    provided,  that  if  at  any  time  the 
pensioner  or  survivor  aforesaid  so  desires,  the  central  pension  authority 
shall,  on  the  payment  of  so  much  of  the  pension  so  paid  as  aforesaid, 
reconvey  or  transfer  the  property  to  the  applicant  or  said  survivor,  as 
the  case  may  be,  and  thereafter  the  value  of  the  property  shall  not  be 
deducted  from  the  capital  value  of  the  accumulated  property  of  the 
pensioner  as  aforesaid,  and  her  or  his  pension  shall  be  adjusted  accord- 
ingly. 

(6)  Notwithstanding  anything  in  the  last  preceding  subsection,  on  the 


96  SOCIAL  INSURANCE.  [Feb. 

death  of  the  pensioner  or  of  the  survivor  as  aforesaid,  the  central  pension 
authority  shall,  on  the  application  of  the  person  or  persons  who  would 
have  been  entitled  to  said  propertj^  if  it  had  not  been  so  conveyed  or 
transferred  as  aforesaid,  and  on  payment  by  the  applicant  to  the  central 
pension  authority  of  the  amount  of  pension  so  paid  in  excess  of  the  amount 
which  would  have  been  payable  had  no  such  conveyance  or  transfer 
been  made,  and  also  on  payment  of  the  amount  of  interest  and  com- 
mission as  aforesaid,  convey  or  transfer  the  property  to  said  applicant. 
(7)  Upon  the  receipt  of  any  moneys  under  the  preceding  subsections  of 
this  section  the  central  pension  authority  shall  forthwith  pay  the  same 
to  the  treasurer  of  the  commonwealth. 

PART  IV.  —  OLD-AGE  PENSION  FUND. 

SECTION  17.  (1)  The  commonwealth  shall  establish  an  old-age 
pension  fund  to  be  open  forever,  to  receive  contributions,  gifts,  escheats, 
unclaimed  savings,  bequests  and  any  other  form  of  property  or  money 
to  be  used  for  the  purposes  of  this  act. 

(2)  The  treasurer  of  the  commonwealth  shall  be  the  custodian  of  any 
property  or  moneys  received  under  this  act,  subject  to  the  direction  of 
the  central  pension  authority  as  directed  by  the  rules  and  regulations  to 
be  made  for  such  purposes  under  section  eleven  of  this  act. 

(3)  In  order  to  have  it  known  that  this  fund  has  been  established,  the 
central  pension  authority  shall,  from  time  to  time,  each  year,  advertise 
it  in  a  fitting  manner  in  some  of  the  various  newspapers  in  the  common- 
wealth. 

WENDELL  P.  THORE. 

EDNA  LAWRENCE  SPENCER. 

EDWARD   G.  MORRIS. 


1917.1  HOUSE  — No.  1850.  97 


STATEMENT  OF  ALLISON  G.  CATHERON,  FRANK  S.  FARNS- 
WORTH  AND  HARRY  C.  WOODILL. 

The  undersigned  members  of  the  Commission  are  satisfied 
that  the  time  is  not  ripe  for  the  adoption  of  any  system  of  old- 
age  pensions  in  Massachusetts.  In  this  conclusion  we  agree 
with  the  majority  of  two  previous  commissions  which  have 
studied  the  subject  on  behalf  of  this  Commonwealth.  While 
there  is  evidence  of  widespread  desire  for  a  system  of  non- 
contributory  old-age  pensions  among  those  who  would  at  once 
or  soon  become  the  beneficiaries  of  such  a  system,  and  while 
this  desire  is  not  altogether  confined  to  such  prospective  bene- 
ficiaries, there  does  not  appear  to  us  to  exist  any  such  wide- 
spread need.  Little  evidence  was  presented  to  the  Commission 
of  actual  suffering  on  account  of  poverty  in  old  age,  though  we 
are  ready,  of  course,  to  admit  that  some  such  suffering  exists. 
The  present  system  of  institutional  care  or  outdoor  relief  is 
admittedly  adequate  to  meet  this  suffering,  so  far  as  it  is  a  mere 
physical  problem,  but  the  argument  is  made  that  the  citizen 
in  old  age  should  not  be  the  subject  of  pauper  relief.  There  is  a 
natural  sympathy  with  this  point  of  view  which  we  ourselves 
feel,  yet  to  grant  relief  in  the  form  of  a  pension  to  all  aged  poor 
is  but  to  change  the  name,  perhaps  the  extent,  of  relief,  but 
not  its  real  character.  It  would  be  much  simpler  to  provide 
merely  that  aged  persons  receiving  outdoor  relief  should  not  be 
deemed  paupers,  and  to  make  existing  relief  more  nearly  ade- 
quate in  individual  cases.  Nearly  all  proposers  of  non-contribu- 
tory old-age  pensions  systems  recognize  that  in  order  to  dif- 
ferentiate them  from  mere  outdoor  relief  plans  some  elements 
of  merit  or  service  must  be  recognized  in  granting  the  pension. 
The  distinctions  made  are  usually  of  the  slightest  character. 
We  are  not  ready  to  admit  that  merely  to  have  arrived  at  a 
needy  old  age  without  having  spent  a  portion  of  one's  life  in 
the  prison  or  almshouse  demonstrates  such  merit  as  to  entitle 
one  to  public  support,  through  a  pension.  Nor  do  we  believe 
it  possible  to  attach  to  any  general  non-contributory  old-age 
pension  system  such  standards  as  to  secure  in  actual  enforce- 
ment a  recognition  of  real  service  to  the  State.  The  politi- 


98  SOCIAL  INSURANCE.  [Feb. 

cal  temptation  to  remove  embarrassing  conditions  is  very 
great,  and  the  task  of  drawing  into  practice  distinctions  as  to 
merit  is  equally  difficult.  We  are  told  by  the  proponents  of 
such  legislation  that  pensions  are  to  be  granted  only  to  the 
deserving  poor.  If  we  are  inclined  to  adopt  such  a  system,  it 
is  worth  while  remembering  the  remark  of  a  certain  -State 
senator  to  members  of  this  Commission:  "I  should  like  to  see 
the  man  with  courage  enough  to  tell  any  of  my  constituents 
that  they  are  not  deserving." 

If  we  are  to  have  non-contributory  old-age  pensions,  let  us 
recognize  frankly  that  we  are  adopting  a  general  and  expensive 
system  of  public  relief  for  the  aged  poor.  Such  a  system  will 
be  in  small  degree  a  substitute  for  existing  institutional  care. 
Such  care  is  seldom  given  except  where  custody  is  needed  on 
account  of  mental,  moral  or  physical  infirmities. 

Of  the  189,000  persons  over  sixty-five  years  of  age  in  Massa- 
chusetts it  is  impossible  to  tell  how  many  will  qualify  under 
any  pension  law.  They  will  not  be  those  in  our  institutions, 
but  will  include  those  now  receiving  outdoor  relief,  and  many 
of  those  now  supported  in  whole  or  in  part  by  relatives  or  by 
their  own  exertions.  Assumptions  are  of  little  value  except  to 
enable  us  to  realize  some  of  the  possible  costs  of  the  system. 
If  one-half  of  the  individuals  over  sixty-five  come  under  the 
law,  and  each  of  these  94,500  persons  receives  a  pension  of 
$150,  not  an  extravagant  assumption,  the  yearly  cost  will  be 
$14,175,000.  This  amount  would  add  greatly  to  the  comfort 
and  sense  of  security  of  many  inhabitants  of  the  Common- 
wealth, but  such  a  result,  however  sufficient  as  an  incentive  to 
individual  benevolence,  is  not  in  our  opinion  a  sufficient  reason 
for  the  appropriation  of  public  funds.  It  is  merely  to  adopt 
Robin  Hood's  method  of  robbing  the  rich  to  give  to  the  poor, 
or,  more  precisely,  robbing  by  taxation  the  industrious  and 
thrifty,  whether  poor  or  rich,  and  giving  to  those  who  have 
need. 

It  may  be  that  at  some  time  conditions  will  exist  which  will 
require  such  a  general  system  of  public  relief,  even  at  the  risk 
of  handicapping  the  industries  of  the  Commonwealth  with  a 
great  burden  of  taxation.  To  us  it  seems  wiser  at  present  to 
devote  public  efforts  to  the  prevention  of  the  conditions  which 


1917.]  HOUSE  —  No.  1850.  99 

call  for  such  relief.  Means  of  lessening  unemployment,  of  im- 
proving the  public  health,  of  relieving  citizens  from  the  economic 
burdens  of  sickness,  of  securing  proper  vocational  education,  of 
encouraging  thrift,  and  like  measures  which  will  enable  the 
industrious  worker  in  much  greater  degree  to  provide  for  his 
own  old  age,  are  to  our  mind  of  more  immediate  importance. 
When  a  pension  system  is  to  be  adopted  it  seems  to  us  wiser 
that  a  contributory  system  be  chosen.  Such  a  plan  may  be 
regarded  as  an  assisted  system  of  savings.  Those  who  advocate 
non-contributory  old-age  pensions  can  hardly  object  to  the 
State's  contribution  to  a  contributory  pension  system.  Others 
will  find  ground  for  supporting  the  State's  share  as  a  means  of 
encouraging  thrift  and  assisting  industrious  effort,  for  one  of 
the  greatest  advantages  of  the  contributory  system  is  that  it 
makes  a  sure  distinction  between  the  worker  and  the  shirker. 
Modern  industrial  conditions  have  their  part  in  aging  the 
worker  before  his  time.  The  employer  finds  it  to  his  advantage 
not  to  retain  the  aged  in  industry.  Both  this  responsibility  and 
this  advantage  are  recognized  in  assessing  the  employer  for  a 
share  in  the  support  of  a  contributory  system. 

It  is  recognized  that  those  who  are  now  old  or  near  the  pen- 
sionable age  cannot  be  supported  on  any  contributory  pension 
plan.  It  would  be  necessary  to  give  such  persons  credit  for 
contributions  in  proportion  to  their  age.  Such  a  concession  to 
the  non-contributory  principle  might  be  justified  merely  as  a 
means  of  introducing  the  contributory  plan. 

It  should,  however,  be  recognized  that  a  man's  normal  wage 
should  be  sufficient  to  provide  not  only  for  the  support  of  the 
man  and  his  family  during  his  earning  period,  but  for  the  sup- 
port of  his  wife  as  well  as  himself  when  he  is,  on  account  of  old 
age,  no  longer  capable  of  earning.  As  a  State-aided,  contrib- 
utory pension  plan  is  the  easiest  way  under  which  a  worker 
can  make  proper  provision  for  old  age,  it  ought  to  be  possible 
for  him  under  such  a  system  to  make  provision  for  his  wife  as 
well.  To  say  that  his  wages  are  insufficient  to  make  such  con- 
tributions is  to  confess  that  he  does  not  receive  a  true  living 
wage.  The  same  principle  really  applies  in  the  case  of  women 
who  are  not  wives  of  wage  earners,  nor  wage  earners  themselves. 
Some  one  is  paying  for  their  support,  and  it  should  be  recog- 


100  SOCIAL  INSURANCE.  [Feb. 

nized  that  adequate  support  includes  proper  support  for  old 
age. 

We  recognize  that  there  is  not  at  present  any  general  demand 
for  a  contributory  system  of  old-age  pensions;  we  submit, 
however,  that  in  principle  and  in  probable  efficiency  in  opera- 
tion it  has  much  more  to  commend  it  than  the  non-contributory 
plan. 

ALLISON  G.   CATHERON. 

FRANK  S.   FARNSWORTH. 

HARRY  C.  WOODILL. 


1917.1  HOUSE  —  No.  1850.  :  ?01 


STATEMENT  OF  EDEN  K.  BOWSER. 

There  has  not  been  in  Massachusetts,  or  in  any  high-wage 
country,  a  sufficient  experience  on  which  to  found  any  final 
judgment  concerning  old-age  pensions.  There  is,  however, 
enough  experience  to  warrant  an  opinion  that  an  old-age  pension 
of  the  non-contributory  type  is  adapted  to  and  is  a  proper 
part  of  our  governmental  function,  when  proper  means  are 
found  to  meet  the  expense. 

Those  deserving  men  and  women  who,  through  misfortune  or  in- 
ability to  save,  are  not  able  to  provide  for  their  old  age,  should  be 
cared  for,  and  it  is  certainly  a  function  of  a  well-governed  State  to 
see  to  it  that  its  citizens  enjoy  the  fullest  measure  of  happiness 
and  self-respect.  Old-age  pensions  are  a  means  to  that  end. 
*  Old-age  pensions,  however,  mean  a  great  increase  in  State 
expense,  perhaps  doubling  or  trebling  our  State  tax.  We  can- 
not at  present  say  that  the  State  is  prepared  to  meet  that  new 
expense.  An  increase  in  State  tax  means  an  increase  in  city 
and  town  tax,  which  taxes  are  for  the  most  part  borne  by  real 
estate  and  the  contributions  of  those  small  real  estate  holders 
who  have  fought  the  same  battles  and  suffered  the  same 
vicissitudes  of  fortune,  sickness,  unemployment  and  losses  as 
those  whom  they  are  to  support  by  old-age  pension. 

The  direct  taxes  coming  to  the  State  through  taxation  of 
intangibles  and  incomes  are  not  now  certain  in  amount,  and 
there  is  little  value  in  speculation  as  to  probable  increases  or 
decreases,  or  as  to  whether  or  not  there  are  new  sources  open 
to  taxation  sufficient  to  take  care  of  old-age  pensions.  Within 
a  year  or  two  we  shall  have  an  exact  demonstration  as  to  how 
large  our  new  State  revenues  are,  and  until  that  time  it  is  not 
good  judgment  to  greatly  alter  or  amend  our  taxation  laws. 

If  it  shall  be  found  that  there  is  an  increase  in  State  income 
adequate  for  such  a  purpose,  definite  legislation  might  then  be 
considered.  And  if  it  shall  be  found  that  taxation  of  intangibles 
will  not  yield  an  adequate  revenue  for  the  cost  of  old-age  pensions, 
then  our  citizens  should  be  squarely  informed  of  that  fact,  so  that 
they  may  not  be  misled  into  voting  for  legislation,  however  de- 
sirable it  may  appear  to  be,  on.  the  mistaken  assumption  that 
some  one  else  is  going  to  pay  the  bills. 

EDEN  K.  BOWSER. 


102      -  SOCIAL  INSURANCE.  [Feb. 


'    STATEMENT  OF  JOHN  P.  MEADE. 

Changed  conditions  of  civilization  have  presented  the  problem  of 
old  age  in  a  new  form.  The  transition  from  an  agricultural  State 
to  a  Commonwealth  where  manufacturing  industries  predominate 
has  resulted  in  a  great  and  growing  multitude  of  wage  workers 
dependent  upon  their  daily  wage  for  sustenance  and  support. 
The  pace  at  which  intricate  machinery  compels  the  worker  to 
respond  with  physical  activity  is  such  that  the  effective  working 
life  of  the  industrial  population  is  shortened.  It  is  a  matter  of 
common  knowledge  that,  in  the  power-driven  industries  of  the 
Commonwealth,  workmen  above  sixty  years  of  age  are  not 
generally  employed.  The  demand  for  speed  eliminates  them 
where  they  are  unable  to  maintain  the  pace.  The  merchant  or 
business  man  approaching  this  age  can  slacken  his  activity  and 
thus  prolong  his  productive  years.  But  when  the  physical 
power  of  the  wage  earner  begins  to  fail  it  is  very  difficult  for 
him  to  keep  his  employment.  There  are  no  reliable  statistics  to 
indicate  the  number  of  aged  persons  employed  in  the  manu- 
facturing industries  of  Massachusetts.  We  do  know,  however, 
that  of  all  persons  injured  in  the  course  of  their  employment  in 
this  Commonwealth  less  than  3  per  cent,  are  sixty  years  of  age 
and  over.  These  figures  from  the  Massachusetts  Industrial 
Accident  Board  can  only  mean  that  a  comparatively  small 
number  of  the  older  people  are  employed  in  industry.  Yet 
medical  progress  and  improved  sanitary  conditions  within 
recent  years  have  undoubtedly  prolonged  the  length  of  human 
life.  In  1880,  for  example,  but  3.5  per  cent,  of  the  population 
of  the  United  States  were  sixty-five  years  of  age  and  upward; 
in  1910  the  percentage  was  4.3  per  cent.,  and  this  during  a 
period  which  was  characterized  by  an  extraordinary  immigra- 
tion of  young  persons.  While  greater  longevity  is  most  desir- 
able it  seems  to  have  the  effect  of  intensifying  the  problem  of 
old-age  dependency.  Because  of  these  facts  there  is  now  a  well- 
established  public  opinion  that  the  almshouse  is  not  a  fitting 
reward  aftej  a  life  of  honorable  conduct  and  toil. 

These  changed  conditions  have  induced  many  countries  out- 
side of  the  United  States  to  relieve  old-age  dependency. 
Nations  less  powerful  and  possessing  less  wealth  than  the 


1917.]  HOUSE  — No.  1850.  103 

United  States  have  apparently  solved  the  question  of  old-age 
relief.  Great  Britain,  Denmark  and  the  British  colonies  in 
Australia  and  New  Zealand  pension  the  needy,  deserving  and 
aged  poor.  Belgium,  France,  Germany,  Italy,  Spain  and 
Sweden  provide  old-age  insurance  under  State  management. 

In  our  own  country  Alaska  recently  adopted  a  plan  of  pro- 
viding for  the  aged  and  indigent  pioneers  of  its  gold  fields. 
The  old-age  pension  law  adopted  in  Arizona  in  1915  was,  how- 
ever, pronounced  unconstitutional  by  its  Supreme  Court.  The 
support  of  the  very  aged  poor  in  this  Commonwealth  at  the 
present  time  is  derived  from  many  sources,  —  from  their 
individual  savings,  private  insurance,  contributions  of  children 
and  other  relatives,  employers'  retirement  pensions,  municipal 
pensions,  United  States  military  pensions,  public  poor  relief 
and  private  charities. 

With  the  annual  income  of  the  average  wage  earner  in  Massa- 
chusetts estimated  at  about  $564,  it  is  evident  that  the  margin 
for  possible  saving  on  such  an  income  is  exceedingly  small  for  a 
large  portion  of  the  working  population.  If  saving  in  this 
respect  is  affected  at  all,  it  is  likely  to  be  at  the  expense  of 
child  labor,  home  work,  overcrowding  in  the  tenements,  or 
other  conditions  not  conducing  to  the  public  welfare. 

Whatever  the  causes  and  conditions  of  this  problem,  it  is  in- 
disputable that  a  portion  of  the  population  reaches  old  age 
without  means  of  support.  Old  age  is  the  last  emergency  of 
life,  for  which  provision  is  neglected  for  every  other  exigency. 
It  is  not  correct  to  assume  that  all  such  persons  have  not  been 
industrious  and  thrifty  during  their  lives.  The  savings  of  many 
are  often  swept  away  by  bad  investment.  Many  business 
failures,  too,  occur,  especially  among  small-sized  concerns,  and 
the  number  of  persons  impoverished  through  fraud  or  mis- 
fortune in  middle  life  is  very  great.  In  the  report  of  the 
Massachusetts  Commission  on  Old  Age  Pensions,  Annuities  and 
Insurance  of  1910  there  will  be  found  the  significant  statement 
that  out  of  14,988  destitute  old  people  interviewed  by  the 
Massachusetts  Old  Age  Commission,  4,677  had  had  some  prop- 
erty at  one  time  or  another. 

It  has  been  said  that  the  possibility  of  a  pension  awaiting 
some  portions  of  the  population  in  their  declining  years  would 


104  SOCIAL  INSURANCE.  [Feb. 

be  sure  to  weaken  their  character  and  habits  of  thrift.  Twenty 
years  of  old-age  pensions  in  Denmark  have  not  visibly  weakened 
the  thrifty  habits  of  these  people.  .Indeed,  the  number  who 
apply  for  poor  relief  between  the  ages  of  fifty-five  and  sixty 
(when  eligibility  to  a  pension  begins)  has  markedly  declined 
within  that  period.  On  the  other  hand,  the  absence  of  any  such 
system  in  this  Commonwealth  has  not  resulted  in  making  thrift 
a  distinctively  Massachusetts  trait.  That  Massachusetts  will 
sooner  or  later  be  forced  to.  face  the  question  of  old-age  relief 
can  scarcely  be  doubted  by  any  one  who  is  familiar  with  the 
condition  of  affairs  in  modern  industrial  communities. 

The  general  reasons  for  some  method  of  relieving  old-age 
dependency  are  admitted  to  be  sound.  Very  few  are  they  who 
do  not  acknowledge  the  desirability  of  old-age  pensions.  Voters 
are  quite  willing,  as  recent  events  have  demonstrated,  to  sign 
petitions  instructing  their  representatives  to  support  bills  in  the 
Legislature,  with  this  purpose  in  view.  Many  large  employers 
of  labor  in  this  Commonwealth  still  retain  on  the  pay  rolls  of 
their  business  some  of  their  superannuated  workmen  who  have 
grown  old  in  the  service.  The  principle  meets  with  almost 
universal  approval.  The  pensioning  of  the  aged  and  deserving 
persons  of  the  Commonwealth  who  have  contributed  by  their 
talent  and  labor  to  its  development  is  a  problem  that  has 
engaged  the  attention  of  the  General  Court  for  many  years. 
Groups  of  citizens'  in  different  parts  of  the  State  petition  the 
Legislature  each  year  to  enact  legislation  designed  to  reduce 
old-age  pauperism. 

The  establishment  of  an  old-age  pension  system  in  Massachu- 
setts can  only  be  accomplished  by  wise  and  constructive  effort. 
Pensions  for  the  aged  persons  of  the  Commonwealth  should  not 
be  granted  indiscriminately.  Only  those  of  good  moral  char- 
acter, who  through  a  lifetime  of  patient  industry  and  toil  have 
contributed  to  the  moral,  social  and  industrial  development  of 
Massachusetts,  can  be  said  to  have  a  legitimate  claim  in  this 
respect.  Pensions  are  justifiable  only  on  the  ground  of  service 
rendered  to  the  Commonwealth.  When  the  attempt  is 'made  to 
secure  an  income  sufficient  to  provide  pensions  for  the  deserv- 
ing and  aged  persons,  without  means  of  support,  the  vital 
difficulty  is  reached.  The  annual  amount  required  would  be  in 


1917.]  HOUSE  — No.  1850.  105 

proportion  to  the  conditions  of  eligibility.  Estimates  based  on 
certain  bills  presented  to  the  Legislature  in  recent  years  vary 
from  $5,000,000  to  $18,000,000.  To  add  either  of  these  amounts 
to  our  present  State  tax  would  be  simply  creating  a  new  burden 
while  attempting  to  escape  an  old  one,  for  in  addition  to  the 
amount  now  being  paid  by  the  State  to  the  recipients  of  public 
relief,  which  investigation  of  the  Bureau  of  Statistics  places  at 
over  $2,250,000,  there  would  then  remain  the  task  of  raising 
through  the  State  tax  the  income  necessary  to  maintain  the 
pension  fund.  The  small  property  owner  and  the  wage  earner 
paying  rent  would  bear  this  burden  chiefly.  The  Industrial 
Commission  of  Wisconsin  in  its  "Report  on  Old  Age  Relief," 
issued  in  March,  1915,  expressed  the  opinion  that  a  fund  should 
be  raised  by  the  State  and  county,  each  contributing  one-half 
of  the  amount  necessary  for  the  purpose  of  providing  pensions 
for  aged  persons  of  its  Commonwealth.  As  a  means  of  securing 
funds  by  the  State  for  this  purpose  it  was  suggested  to  levy  a 
special  poll  tax  of  $1.50  per  annum  upon  all  citizens  between  the 
ages  of  twenty  to  sixty  years.  This  suggestion  has  at  least  the 
merit  of  candor.  It  recognizes  the  fact  that  when  pensions  are 
paid  out  of  general  taxation  they  cannot  be  said  to  be  entirely 
non-contributory.  The  term  "non-contributory,"  in  its  rela- 
tion to  old-age  pensions,  can  only  be  properly  used  to  designate 
that  system  which  does  not  employ  personal  contributions  for 
the  specific  purpose  of  providing  the  payments.  In  the  final 
analysis  the  citizens  of  the  Commonwealth  must  be  called  upon 
to  pay  the  bills. 

I  favor  a  system  of  pensions  for  the  aged,  needy  and  deserv- 
ing persons  of  Massachusetts  who  are  without  income  or  means. 
I  hold  it  to  be  the  duty  of  the  Commonwealth  to  maintain  in 
reasonable  comfort  those  persons  who  come  within  this  classi- 
fication, and  who  by  years  of  service  have  contributed  to  its 
moral,  social  and  industrial  progress.  Pensions  for  such  persons 
would  simply  mean  an  appreciation  of  those  qualities  that  make 
for  a  prosperous  Commonwealth.  They  would  be  as  honorable 
as  that  of  the  soldier,  who  offers  his  life  for  the  preservation  of 
the  State. 

Taxation  is  the  only  effective  means  by  which  to  meet  the 
expenses  incidental  to  an  old-age  pension  system.  To  share  the 


106  SOCIAL  INSURANCE.  [Feb. 

cost  of  maintaining  the  expenses  of  government,  according  to 
the  ability  of  each  to  pay,  is  the  most  practical  and  just  prin- 
ciple. The  Tax  Commissioner  of  Massachusetts,  in  House 
Document  No.  2290  of  1913,  expresses  the  opinion  that  in- 
tangible property  to  the  value  of  $4,500,000,000  is  escaping 
taxation.  A  reasonable  assessment  on  this  property  would 
yield  a  sum  sufficient  to  maintain  a  pension  system  for  the  aged 
and  needy.  Legislation  was  enacted  by  the  General  Court  of 
1916  with  a  view  to  increasing  the  revenues  of  the  State  by  the 
taxation  of  intangibles  and  incomes.  It  has  been  said  that 
"within  a  year  or  two  we  shall  have  an  exact  demonstration 
as  to  how  large  our  new  State  revenues  are,  and  until  that  time 
it  is  not  good  judgment  to  greatly  alter  or  amend  our  taxation 
laws."  While  many  will  doubtless  agree  with  this  view,  it  is 
sound  to  insist  that  the  Legislature  should  evolve  some  laws 
that  would  insure  its  rightful  revenue  from  the  taxation  of 
intangible  personalty.  As  a  means  of  meeting  one  of  its  highest 
duties,  namely,  providing  for  those  aged  persons  without  means 
whose  lives  have  been  spent  in  its  service,  the  Commonwealth 
should  establish  an  old-age  pension  system  and  secure  from  the 
taxation  of  intangibles  the  means  to  support  it. 

JOHN   P.   MEADE. 


1917.]  HOUSE  —  Xo.  1850.  107 


REPORT  ON  UNEMPLOYMENT. 


The  problem  of  unemployment  has  attracted  the  attention  of 
the  best  minds  in  the  Commonwealth  for  many  years.  The 
effect  of  involuntary  idleness  upon  the  general  well-being  of  the 
individual  and  its  depressing  influence  in  the  home  constitutes  a 
problem  closely  associated  with  the  progress  of  the  Common- 
wealth. 

Governor  McCall,  in  his  inaugural  address  to  the  Legislature 
of  1916,  took  occasion  to  present  this  matter,  urging  attention 
to  its  serious  import  to  the  State,  and  asking  that  a  constructive 
plan  be  devised  to  diminish  unemployment  and  the  evils  arising 
therefrom.  In  forcible  language  he  described  the  acute  con- 
/litions  prevailing  in  the  latter  part  of  the  year  1914  and  early 
in  the  year  of  1915,  and  said:  - 

The  unemployment  crisis  of  the  past  year  revealed  our  unprepa  redness 
in  methods  of  dealing  with  this  grave  problem  methodically  and  effectively. 
We  already  have  the  beginnings  of  a  system  of  State  employment  offices, 
and  it  seems  clear  that  the  State  has  a  constructive  opportunity  in  this 
direction  of  which  immediate  advantage  should  be  taken.  Two  recent 
special  commissions  have  recommended  legislation  along  these  lines  as 
being  both  expedient  and  necessary. 

One  of  the  most  deplorable  problems  in  our  civilization  is  the 
suffering  of  the  industrious  citizen  because  of  lack  of  employ- 
ment. When  the  income  of  the  wage  earner  is  interrupted  the 
welfare  of  the  home  is  affected.  Especially  is  this  true  when  the 
family  is  large  and  the  duty  of  securing  the  necessities  of  life 
for  a  number  of  small  children  is  imperative.  A  serious  prob- 
lem in  a  community  is  the  presence  of  groups  of  families  whose 
provider  is  unable  to  obtain  the  means  of.  support  because  of 
inability  to  secure  work. 

The  effects  of  unemployment  are  not  restricted,  however,  to 
the  anxiety  and  hardships  of  those  out  of  employment.  They 


108     .  SOCIAL  INSURANCE.  [Feb. 

constitute  a  serious  injury  to  the  entire  community,  which  be- 
comes manifest  in  the  consequences  of  acute  poverty.  The  need 
for  some  practical  means  of  diminishing  unemployment  in 
Massachusetts  is  apparent  at  once  when  it,  is  realized  that  three- 
fifths  of  the  wage  earners  of  Massachusetts  earn  an  annual 
average  wage  of  less  than  $575  a  year 1  and  we  are  told  that  out 
of  700,000  workers  in  the  industrial  establishments  in  this 
State  over  400,000  receive  less  than  $675  a  year.1  Abnormal 
conditions  in  the  industrial  world  have  brought  about  increased 
wages  in  some  portions  of  the  Commonwealth  since  these  figures 
were  compiled.  This  does  not  mean  lightening  the  burden  of 
the  wage  earner  to  an  appreciable  extent,  because  of  the  extra- 
ordinary increase  in  the  cost  of  commodities. 

Regular  employment  is  essential  to  the  conservation  of  health 
and  the  development  of  character.  It  is  indispensable  to  the 
well-being  of  the  home.  "Reasonable  security  of  employment 
of  the  bread  earner,"  said  W.  K.  Beveridge,  "is  the  basis  of  all 
private  duties  and  all  sound  action."  On  account  of  inability 
to  get  work,  wage  earners  lose  five  days  for  every  two  lost 
through  sickness.2  From  the  standpoint  of  economic  loss  to 
the  worker,  unemployment  should  be  considered  before  acci- 
dents and  sickness. 

More  effective  machinery  is  needed  to  bring  the  man  and  the 
job  together.  The  marketing  of  materials  has  become  most 
efficiently  organized,  but  very  few  adequate  means  exist  to 
bring  the  buyer  and  seller  of  labor  together. 

The  fluctuations  in  the  numbers  employed  in  the  industrial 
establishments  of  the  Commonwealth  indicate  the  extent  to 
which  employees  are  taken  on  and  discharged  in  the  course  of 
a  year.  For  example,  during  1914  there  were  employed,  during 
the  month  of  March,  633,583  wage  earners  in  the  industries  of 
Massachusetts,  while  in  December  of  the  same  year  the  number 
dropped  to  580,489.!  Thus  we  observe  that  at  least  54,000 
wage  earners  in  the  manufacturing  industries  of  the  State  were 
thrown  out  of  employment  because  of  a  falling  off  in  production 
during  a  period  of  only  nine  months. 

The  terrible  loss  to  the  community  caused  by  casual  labor 

1  Bureau  of  Statistics. 

2  Massachusetts  Commission  on  Unemployment,  1915. 


1917.]  HOUSE  —  No.  1850.  109 

is  appalling,  the  cost  not  only  in  dollars  and  cents,  because 
of  the  poverty  arising  therefrom,  but  the  cost  in  the  health 
and  the  lives  of  these  workers.  It  is  in  their  families  that  the 
children,  either  die  in  the  first  few  months  of  life  or  grow  to  a 
warped  and  stunted  maturity,  to  produce  in  turn  another 
generation  of  inferior  men  and  women.  As  proof  of  the  effect 
of  casual  labor  on  the  health  and  prosperity  of  a  community, 
it  has  been  stated  that  four-fifths  of  the  problems  of  the  med- 
ical officer  of  health  arise  where  the  casual  labor  class  con- 
stitutes possibly  one-tenth  of  the  population,  and  that  it  is  this 
same  class  wrhich  constitutes  two-thirds  of  all  our  pauperism 
other  than  that  of  old  age,  sickness,  widowhood  and  orphanage. 
We  therefore  advocate  the  regularization  of  industry  by 
Federal  and  State  control,  to  the  end  that  the  total  national 
demand  each  year  may  be  equalized.  The  help  of  private 
industries  is  imperative  to  this  end,  in  avoiding  seasonal  and 
other  fluctuations.  These  results  can  be  brought  about  in 
private  industries  — 

1.  By  the  reduction  of  the  turnover  of  labor,  under  an  em- 
ployment manager  (the  turnover  of  labor  is  at  present  so  great 
that  often  to  keep  up  a  force  of  300  men,  1,000  are  engaged  and 
discharged). 

2.  By  a  scientific  transfer  of  workers  between  departments. 

3.  By  planning  production,  whenever  possible,  six  months  in 
advance. 

4.  By  building  up  slack  season  trade. 

5.  By  going  after  steady  rather  than  sporadic  or  speculative 
business. 

6.  By  careful  study  of  market  conditions,  and  adjustment  of 
the  business  to  take  advantage  of  them. 

7.  By  the  establishment,  when  possible,  of  foreign  trade  to 
supplement  domestic  trade,  since  a  diversity  of  customers  tends 
to  regularize  the  demand.     Employers  should  co-operate  with 
each  other,  and  with  all  others  making  legitimate  efforts,  toward 
the  lessening  of  unemployment;  they  are,  indeed,  already  begin- 
ning to  d'o  so. 

The  above  suggestions  are  in  general  accord  with  the  ideas 
of  Mr.  John  B.  Andrews,  Secretary  of  the  American  Asso- 
ciation for  Labor  Legislation,  as  set  forth  in  Appendix  C  of 


110  SOCIAL  INSURANCE.  [Feb. 

the    report    of    the    Ontario    Commission    on    Unemployment, 
1916. 

Steady  jobs  that  afford  a  competent  living  to  citizens  are  of 
vital  importance  to  the  Commonwealth.  Dr.  Royal  Meeker, 
United  States  Commissioner  of  Labor  Statistics,  lays  bare  the 
common  attitude  toward  unemployment,  and  defines  its  true 
significance  in  the  following  statement :  - 

Unemployment  is  the  greatest  evil  of  our  competitive  industrial  system. 
We  have  been  exceedingly  slow  to  admit  the  actuality  of  involuntary  un- 
employment. Even  yet  we  more  than  half  believe  that  he  who  seeks  may 
find  work  at  all  times,  and  that  unemployment  is  due  to  the  refusal  of 
workers  to  work.  Only  in  periods  of  industrial  crisis  and  depression  do  we 
awaken  to  some  faint  realization  of  the  fact  of  unemployment  and  the  tre- 
mendous money  losses  and  the  irreparable  injuries  to  the  character  of 
workless  workers  resulting  therefrom.  With  enormous  toil  and  turmoil 
and  clatter  of  preparation  we  organize  soup  houses,  bread  lines  and  phil- 
anthropic " industries,"  which  produce  for  the  most  part  piffling  wares  of 
little  or  no  utility  at  substandard  wages.  With  the  onset  of  good  times  we 
drop  our  fevered  activities  in  formulating  complete  programs  to  take  care 
of  unemployment,  relapse  into  our  normal  state  of  profound  indifference, 
and  speedily  forget  the  unemploj^ed  and  their  unemployment.  We  have 
never  as  yet  acknowledged  or  realized  that  the  unemployed  (another  name 
for  the  poor)  we  have  always  with  us.  In  the  best  of  times  there  is  in  the 
United  States  an  appalling  amount  of  unemployment  even  in  our  most 
stable  industries.  The  exceedingly  fragmentary  statistics  at  our  command 
indicate  that  the  losses  due  to  unemployment  are  immensely  greater,  both 
in  money  and  in  morals,  than  the  losses  due  to  industrial  accidents  or  in- 
dustrial illness.  All  these  industrial  hazards  must  be  frankly  recognized 
and  frankly  faced.  The  ostrich,  we  are  told,  thinks  to  efface  his  enemies 
from  the  landscape  by  burying  his  head  in  the  sand.  He  is  a  firm  believer 
in  the  blissfulness  of  ignorance  and  the  folly  of  wisdom.  We  have  much 
in  common  with  the  ostrich.  We  hold  tenaciously  to  the  philosophy  that 
social,  economic  and  political  evils  exist  only  when  we  open  our  eyes  to 
them;  that  industrial  accidents,  illness  and  unemployment  are  not  burdens 
until  we  provide  some  sane  method  of  carrying  or  eliminating  them. 
Until  very  recently  our  favorite  method  of  dealing  with  industrial  hazards, 
including  involuntary  unemployment,  was  to  close  our  eyes  tightly  and 
bury  our  communal  head  in  the  sand. 

Expert  opinion  in  this  Commonwealth  is  in  accord  with  the 
foregoing  statement.  The  necessity  for  permanent  interest  in 
the  matter  of  unemployment  is  forcibly  set  forth  in  the  report 
of  the  Massachusetts  Committee  to  promote  work  during  the 


1917.]  HOUSE  —  No.  1850.  Ill 

year  1915.     This  group  of  able  citizens  reached  the  opinion 
that- 

The  permanent  and  fundamental  aspects  of  the  problems  of  unemploy- 
ment should,  however,  be  kept  before  the  public  mind  persistently,  until 
some  practical  propositions  for  the  betterment  of  this  great  evil  are  brought 
forward.  It  is  to  be  hoped  many  committees,  both  voluntary  and  official, 
will  be  formed  to  think  out  this  complex  problem,  and  that  the  interest  in 
it  will  not  be  allowed  to  flag  when  the  immediate  need  has  passed.  What- 
ever the  proper  preventive  measures  may  be,  it  is  certain  that  they  must 
be  provided  for  during  good  times.  After  the  bitter  experiences  of  the  past 
winter,  our  State  will  have  much  to  blame  itself  for  if  the  next  depression 
finds  us  equally  ill-prepared  to  meet  it. 

Other  Massachusetts  commissions  have  devoted  much  time 
to  the  consideration  of  this  problem.  The  Commission  on 
Immigration  of  1914,  in  considering  the  relation  of  immigra- 
tion to  unemployment,  gave  expression  to  the  following  view:  - 

The  first  step  toward  the  reduction  of  the  evils  of  the  present  system  of 
distribution  is  a  State  employment  agency,  which  shall  make  a  compre- 
hensive study  of  the  labor  market,  shall  give  special  attention  to  casual 
labor  problems,  shall  do  the  practical  work  of  placing  the  individual  man 
in  each  individual  job,  and  shall  develop  a  follow-up  system  so  that  sub- 
sequent work  shall  be  increasingly  efficient. 

An  extension  of  our  existing  public  employment  offices  to 
other  parts  of  the  Commonwealth,  and  the  adoption  of  a  plan 
to  secure  the  support  and  co-operation  of  workmen  and  em- 
ployers, would  be  the  most  practical  means  with  which  to 
approach  the  problem  of  unemployment.  It  would  be  the  first 
step  in  organizing  the  labor  market  on  a  scientific  basis.  Just 
as  the  produce  exchange  brings  about  co-operation  between 
those  who  buy  and  those  who  sell,  so  should  the  public  employ- 
ment office  be  a  means  of  placing  the  unemployed  worker  in 
touch  with  occupational  activity.  It  would  seem  to  be  the 
most  practical  means  at  hand  for  this  purpose.  As  a  barometer 
of  industrial  conditions  in  the  Commonwealth  it  would  be  of 
great  value,  and  it  would  also  be  of  benefit  as  a  practical  insti- 
tution for  the  accumulation  of  important  statistical  data. 

One  of  the  most  striking  facts  of  modern  industrial  life  is  the 
enormous  waste  of  time  and  money  by  working  people  in  search 
of  employment.  A  man  seeking  work  to-day  must  try  many 


112  SOCIAL  INSURANCE.  [Feb. 

methods.  The  most  common  is  to  apply  at  the  actual  place 
where  labor  may  be  found.  He  may  tramp  or  ride  to  different 
parts  of  the  city,  or  he  may  even  answer  advertisements  in  the 
daily  newspapers,  and  in  following  them  up  may  find  himself  in 
line  at  the  entrance  of  some  of  our  industrial  establishments  in 
company  with  a  large  group  of  applicants  for  the  same  job.  If 
he  has  some  money  at  his  disposal  he  may  try  a  private  employ- 
ment agency,  where  he  will  find  established  the  custom  of 
paying  from  5  to  20  per  cent,  of  his  first  month's  earnings  for 
the  job. 

The  cost  to  the  employers  of  this  Commonwealth  in  main- 
taining employment  departments  in  connection  with  their  busi- 
ness, and  in  advertising  in  the  newspapers  in  Massachusetts  for 
workmen,  is  an  expensive  item,  and  one  which  must  in  the 
final  analysis  be  made  a  charge  upon  the  industry.  It  is  no 
exaggeration  to  say  that  the  aggregate  cost  of  this  feature  of  the 
industrial  life  of  the  State  represents  millions  of  dollars.  Such 
conditions  are  unscientific,  uneconomic  and  constitute  a  burden 
to  the  employer,  the  workmen  and  the  consuming  public. 

There  is  no  reliable  data  at  hand  to  prove  what  it  costs  the 
wage  earners  of  this  Commonwealth  to  secure  employment 
through  private  employment  agencies.  We  have  learned,  how- 
ever, from  investigation  that  in  the  State  of  California  it  is 
known  that  more  than  $400,000  was  paid  by  the  working  people 
to  private  employment  agencies  in  a  single  year.1  These  facts 
warrant  us  in  stating  that  the  system  of  placing  workers 
through  the  private  employment  offices  in  the  industrial  estab- 
ments  of  Massachusetts  is  costly  to  the  people  of  our  Common- 
wealth. 

Much  of  our  unemployment  can  be  eliminated  by  a  modern 
organization  of  the  labor  market.  The  loss  of  time  between 
jobs  for  workers  represents  millions  of  dollars  in  the  aggregate, 
and  this  waste  a  unified  system  of  State  employment  offices 
could  reduce  to  a  very  low  minimum  by  connecting  work  and 
the  worker  with  the  least  possible  delay. 

The  use  of  the  labor  exchange  in  the  industrial  Nations  of 
Europe  has  passed  the  experimental  stage.  It  is  now  looked 
upon  as  an  integral  part  of  every  system  of  social  insurance. 

1  California  Commission  on  Immigration  and  Housing  Conditions. 


1917.]  HOUSE  —  No.  1850.  113 

It  occupies  a  prominent  place  in  the  industrial  system  of  Ger- 
many. In  England  no  worker  is  more  than  5  miles  away  from 
a  labor  exchange,  and  in  the  countries  of  northern  Europe  labor 
exchanges  are  now  looked  upon  as  essential  factors  of  industrial 
development. 

It  is  plain  that  the  cost  of  relieving  unemployment  is  not  a 
net  expense.  We  are  especially  impressed  with  that  part  of  the 
report  of  the  Ontario  Commission  on  Unemployment  which 
reads  as  follows:  — 

Special  stress  is  laid  on  the  prevention  of  disease.  So,  too,  the  preven- 
tion of  unemplo}rment,  when  feasible,  is  far  better  than  the  best  provision 
of  relief.  In  any  country  society  is  faced  by  the  alternative  of  leaving 
those  in  distress  to  shift  for  themselves  as  best  they  may,  or  of  relieving 
them  on  some  considered  plan*  The  cost  of  inaction  must  be  balanced 
against  the  cost  of  adequate  relief.  Inaction  involves  the  physical  and 
often  the  moral  deterioration  of  many  workers.  It  encourages  indiscrimi- 
nate begging,  and  is  responsible  for  the  growth  of  a  parasitic  class.  It 
compels  mothers  with  young  children  to  neglect  their  domestic  duties  in 
order  to  secure  a  livelihood.  It  may  compel  large  numbers  of  young  chil- 
dren to  go  to  work  at  an  age  when,  for  their  own  sake  and  for  the  general 
good,  they  should  remain  in  school. 

It  is  difficult  to  believe  that  any  form  of  organized  relief,  which  does 
not  directly  pauperize,  can  be  more  costly  to  society  than  the  refusal  to 
take  action.  Payment  for  such  refusal  is  always  exacted  in  the  form  of 
increased  provision  for  the  sub-normal  and  for  criminals,  and  constitutes 
a  very  heavy  burden. 

As  an  instrument  to  relieve  much  of  the  unemployment  in 
this  county  the  public  employment  office  has  demonstrated  its 
value.  An  investigation  conducted  by  this  Commission  of  its 
operation  in  the  United  States  has  convinced  us  of  its  efficiency 
and  adequacy  in  diminishing  unemployment. 

Reports  from  the  chief  industrial  States  in  the  country  indi- 
cate an  awakened  interest  in  this  matter  and  in  a  more  efficient 
and  intelligent  use  of  the  public  employment  office  as  a  factor 
in  treating  with  unemployment. 

The  Commissioner  of  Labor  of  Missouri,  in  replying  to  the 
questions  addressed  to  him  by  the  Commission  relative  to  the 
question  of  unemployment,  said : 

There  is  no  doubt  in  my  mind  but  that  employment  bureaus  are  needed 
in  the  chief  industrial  centers  throughout  the  country.  In  fact,  all  the 


114  SOCIAL  INSURANCE.  [Feb. 

large  cities  should  have  a  labor  exchange,  which  should  be  a  part  of  a  gen- 
eral system  wherein  the  employer  and  employee  could  meet  and  be  referred 
to  each  other  as  they  may  desire  or  as  conditions  may  require. 

These  offices  are  really  just  beginning  to  be  substantially  established. 
It  is  a  great  work  to  be  done.  The  evils  of  unemployment  can  at  least  be 
minimized;  certainly  the  causes  and  conditions  of  unemployment  can  be 
truthfully  ascertained,  and  the  offices  would  at  least  be  able  to  suggest  a 
remedy  for  overcoming  the  handicaps,  trials  and  troubles  incident  to  sea- 
sonal occupations  or  employment.  A  general  record  system,  providing 
full,  complete  information  as  to  conditions  of  industrial  employment,  em- 
ployers and  employees,  and  as  to  each  industrial  center  where  the  offices 
are  located,  to  be  used  in  a  systematic  way  by  some  means  of  communica- 
tion from  one  center  to  the  other  throughout  the  country,  would  be  the 
most  valuable  asset  to  an  industry  that  could  be  provided,  because  then 
you  would  be  able  to  work  out  all  plans  to  provide  remedies  for  social  and 
economic  ills. 


Another  large  industrial  State  —  the  State  of  New  York  — 
established  under  its  new  industrial  commission  a  bureau  of 
employment,  with  a  director  who  is  charged  with  the  duty  of 
supervising  State  employment  offices.  The  first  office  was  es- 
tablished in  Brooklyn  early  in  1915.  Shortly  afterwards  offices 
were  established  in  Buffalo,  Rochester,  Syracuse  and  Albany. 
The  administrative  office  is  located  in  New  York  City,  and  the 
branch  offices  throughout  the  State  send  in  daily  reports  of 
their  work  to  the  main  office.  Through  this  method  all  the 
offices  are  kept  in  constant  touch  with  one  another,  and  all  the 
employees  are  under  civil  service. 

In  New  York  the  law  calls  for  separate  departments  for  men 
and  women  and  a  separate  department  for  juveniles.  Each 
office  has  an  advisory  committee  composed  of  an  equal  number 
of  representatives  of  organized  labor  and  representatives  of  em- 
ployers' associations,  with  a  provision  for  equality  of  voting 
power. 

The  State  director,  in  describing  the  functions  exercised  by 
the  New  York  Public  Employment  Bureau,  informs  the  Com- 
mission as  follows :  — 

It  is  a  settled  question  that  it  is  the  duty  of  the  State  to  give  the  child 
an  academic  education,  and  we  are  already  reaching  out  toward  the  phase 
of  giving  him  an  industrial  education.  It  is  surely  just  as  much  the  duty 
of  the  State,  after  giving  the  child  the  education  it  does,  to  further  direct 


1917.]  HOUSE  — No.  1850.  115 

him  in  the  choosing  of  his  life  work.  This  can  only  be  done  practically 
and  effectively  through  a  wide  system  of  public  employment  offices. 

Every  day  that  a  workman  loses,  through  the  lack  of  knowledge  as  to  a 
proper  opening  for  his  services,  is  a  loss  to  himself  and  society.  All  com- 
munities should  have  a  central  bureau  of  information  where  the  worker  can 
learn  what  kind  of  openings  there  are  in  that  community  for  him,  and 
where  the  employer  may  turn  for  an  opportunity  to  make  a  broad  selection 
of  the  kind  of  workers  necessary  for  his  particular  work.  Through  the 
placing  of  adult  workers  in  positions  for  which  they  are  fitted  the  public 
employment  offices  become  acquainted  with  industry  and  its  demands  and 
opportunities.  This  information  can  be  used  by  public  employment  offices 
in  covering  the  first  phase  of  their  work  mentioned  above,  namely,  that  of 
practical  and  proper  juvenile  direction  and  placement. 

The  establishing  of  our  public  school  system  has  practically  eliminated 
the  private  school,  except  in  special  lines.  Private  employment  bureaus 
(which  charge  a  fee)  may  probably  be  necessary  for  many  years,  but  for 
all  general  lines  of  work,  from  the  highest  to  the  lowest,  it  is  the  duty  of 
the  State  to  furnish  workers  with  information  regarding  industries  and 
opportunities,  and  incidentally  to  save  a  large  class  of  workers  from  the 
vicious  exploitation  carried  on  by  some  private  employment  agencies. 

And  further,  in  regard  to  public  employment  bureaus,  he 
said :  — 

These  offices  are  handling  all  sorts  of  workers,  from  the  professional  man 
to  the  man  who  uses  a  pick  and  shovel.  Some  of  the  offices  have  estab- 
lished separate  departments  for  the  disposal  of  teachers  and  farm  hands. 

In  the  women's  department  domestics  naturally  have  led  in  number. 
Excluding  the  domestics  from  the  calculation,  more  than  60  per  cent,  of 
the  places  filled  in  all  the  offices  up  to  this  time  belong  in  the  class  known 
as  skilled  or  professional.  Public  employment  offices  have  been  too  gen- 
erally regarded  as  places  fitted  only  to  handle  common  labor  or  the  near- 
unemployable.  The  policy  in  this  State  for  these  offices  is  not  to  attempt 
to  handle  people  who  have  to  be  "reclaimed."  That  work  for  the  present 
has  to  be  left  to  charitable  organizations.  The  attempt  is  being  made  to 
make  the  offices  bureaus  of  information  for  the  capable  workers  on  the 
one  hand,  and  the  employers  on  the  other.  Endeavor  is  being  made  to 
eliminate  the  use  of  the  word  "free"  in  connection  with  these  offices.  It 
is  true  then-  services  are  free,  and  so  also  are  the  services  of  the  public 
school.  We  have,  however,  long  since  outgrown  the  use  of  the  term  "free " 
in  connection  with  public  schools.  We  should  not  retain  it  in  referring  to 
the  public  employment  offices,  giving  them  the  taint  of  charity,  and  thus 
driving  away  capable  workers  who  resent  the  implication  of  being  patron- 
ized. No  parent,  however  well-to-do,  thinks  of  charity  when  he  sends  his 
child  to  the  public  school.  Too  often  he  will  not  patronize  a  "free"  public 
employment  bureau,  except  as  a  last  resort.  One  of  the  greatest  benefits 


116  SOCIAL  INSURANCE.  [Feb. 

of  these  new  offices  is  that  they  are  training  a  set  of  men  and  women  who 
eventually  will  be  capable  of  dealing  adequately  with  the  question  of 
properly  fitting  workers  into  industry.  The  employees  of  these  offices  are 
now  coming  in  contact  with  the  needs  of  industry  on  the  one  hand,  and  the 
needs  of  applicants  for  work  on  the  other.  It  is  not  every  man,  even 
though  he  may  be  well  trained  in  other  lines,  who  can  understand  the  needs 
of  the  employer  for  the  different  kinds  of  workers,  or  who  can  take  an 
order  for  help  in  hand  and  select  from  the  individuals  in  front  of  him,  or 
from  his  registration  lists,  one  who  is  best  fitted  to  fill  all  the  demands  of 
the  position  offered.  The  haphazard  method  of  hiring  men,  which  so  often 
obtains,  has  been  the  means  of  creating  many  unemployables.  Men  under 
the  stress  of  an  immediate  need,  either  of  themselves  or  the  employer, 
have  been  placed  in  positions  for  which  they  were  so  poorly  fitted  that  the 
work  was  not  only  disagreeable  to  them,  but  they  could  not  adequately 
meet  the  demands  of  the  position.  The  consequences  of  this  were  discon- 
tent on  the  part  of  the  worker  and  resentment  on  the  part  of  the  employer. 
This  same  man  adequately  fitted  to  a  position  might  not  only  have  been 
happy  in  his  work,  but  far  more  productive,  meaning  higher  wages  on  the 
one  hand,  and  on  the  other,  greater  output,  with  less  expenditure  of 
strength. 

'  When  the  general  public,  and  especially  employers,  become  better  ac- 
quainted with  the  true  function  of  public  employment  offices,  when  they 
give  them  their  confidence  and  patronage,  it  is  to  be  expected  that  the 
offices  will  become  what  they  should  be,  actual  bureaus  of  industrial  in- 
formation. 

In  States  where  seasonal  occupations  predominate  the  bene- 
fits of  the  public  employment  office  to  employer  and  workman 
alike  are  acknowledged.  In  the  State  of  South  Dakota  public 
employment  offices  managed  under  the  Department  of  Immi- 
gration are  said  to  be  doing  excellent  work  in  this  respect.  Ex- 
plaining its  work  in  a  letter  to  our  Commission,  the  commis- 
sioner says :  — 

The  public  employment  office  managed  by  this  department  gets  the  man 
for  the  employer  when  he  is  needed,  and,  to  a  less  extent,  we  find  work  for 
the  unemployed.  Our  work  comes  largely  in  providing  harvest  labor  for 
the  grain  farmer,  as  we  need  about  8,000  to  10,000  transient  laborers  in  a 
good  grain  year.  It  is  conducted  especially  to  meet  the  need  of  this  sea- 
sonal labor.  I  do  think  that  a  system  of  labor  exchanges  can  prove  mu- 
tually helpful,  each  supplementing  the  other.  Our  labor  matters  are 
pretty  well  adjusted,  and  not  difficult  in  any  season  except  for  the  harvest. 
We  have  united  in  what  is  known  as  the  National  Farm  Labor  Exchange 
covering  all  the  grain-growing  territory  of  the  mid-western  States  from 
Texas  to  North  Dakota,  and  think  that  we  see  some  desirable  results, 
from  this. 


1917.]  HOUSE  —  No.  1850.  117 

The  Department  of  Labor  of  the  State  of  Michigan  sends  to 
the  Commission  the  following  in  reply  to  questions  seeking  in- 
formation with  regard  to  the  utility  of  the  public  employment 
office  in  that  State :  — 

In  places  where  there  are  no  employment  offices  at  the  present  time  the 
man  looking  for  a  position  is  compelled  to  tramp  from  one  concern  to 
another  and  wait  for  several  hours  in  line  to  see  the  superintendent,  and 
then  perhaps  is  told  that  they  are  not  in  need  of  help,  and  must  then  con- 
tinue his  journey  until  he  has  made  all  the  factories.  In  the  cities  where 
we  have  public  employment  offices  the  employers  of  labor  telephone  in 
their  wants,  the  persons,  looking  for  work  apply  at  the  employment  office, 
and  are  advised  whether  or  not  there  is  any  demand  for  help  in  their  line, 
and  if  so,  where  such  demand  is.  Their  ticket  from  the  employment  office 
insures  them  an  audience  with  the  employer  at  once.  It  is  simply  a  more 
convenient  and  modern  method  than  the  old  style. 

In  Michigan  we  have  ten  employment  offices  operated  by  the  State, 
five  having  been  opened  during  the  past  year.  It  is  my  intention  to  ask 
the  Legislature  for  an  appropriation  in  order  to  open  several  more  offices 
next  year. 

In  1915  there  were  54,000  persons  sent  from  our  five  employment  offices 
in  operation  at  that  time,  and  another  office  opened  at  Flint  in  June,  1915, 
making  six  in  all. 

The  managers  of  the  several  bureaus  in  Michigan  report  to  each  other 
every  day  concerning  the  number  of  people  sent  out  and  the  number  of 
people  requested  by  employers,  together  with  other  information  they  may 
have.  In  some  cities  we  may  have  an  oversupply  of  labor  and  in  others  a 
shortage,  and  in  that  way  we  are  able  to  inform  the  employers  where  there 
is  an  over-supply  of  labor,  and  upon  receipt  of  an  order  from  a  distant  town 
or  city  men  are  sent  from  the  nearest  point. 

I  do  not  claim  that  in  case  of  a  calamity,  or  a  universal  shutdown  of 
plants  throughout  the  State,  an  employment  office  could  be  of  any  material ' 
assistance  in  localities  where  there  would  be  " nothing  doing,"  except  that 
they  might  be  used  as  bureaus  of  information  by  people  seeking  employ- 
ment, by  keeping  in  touch  with  other  parts  of  the  country  where  there 
might  be  a  demand  for  help. 

It  is  interesting  to  note  that  the  State  of  Illinois  has  a  general 
advisory  board,  in  connection  with  its  various  free  employment 
offices,  which  is  concerned  with  all  problems  connected  with 
unemployment,  as  well  as  a  local  advisory  board  for  each  of  its 
free  employment  offices  located  at  its  various  industrial  centers. 
The  following  is  an  excerpt  from  a  letter  to  the  Commission  by 
the  general  superintendent  of  the  Illinois  Free  Employment 
Office:  — 


118  SOCIAL  INSURANCE.  [Feb. 

In  regard  to  the  advantages  to  the  employer  and  the  workman  of  the 
public  employment  offices  in  this  State  we  beg  to  advise  that,  in  times  of 
labor  scarcity  such  as  we  are  now  experiencing,  the  advantages  to  the  em- 
ployer are  only  too  manifest.  For  instance,  we  receive  calls  from  employers 
daily  for  assistance  in  finding  for  them  help  to  fill  their  requirements  which 
they  have  been  unable  to  fill  from  any  other  source.  This  is  probably  due 
to  the  excellent  publicity  secured  and  reputation  enjoyed  by  this  office. 

We  have  demonstrated  to  their  satisfaction  the  fact  that  an  efficient 
free  labor  exchange  receives  the  patronage  of  all  classes  seeking  employ- 
ment, and  consequently  is  the  source  to  which  all  employers  appeal  in 
experiencing  difficulty  in  securing  the  help  which  they  need.  In  a  like 
manner  confidence  is  installed  in  the  workman  who  finds  himself  out  of  a 
position,  and  where  a  reputable  free  public  employment  office  exists  he 
soon  learns  that  every  available  opportunity  is  generally  listed  with  such 
an  office.  Consequently,  the  advantages  of  an  office  of  this  kind  are  so 
apparent  that  we  know  of  no  argument  which  could  be  used  to  advocate 
its  abolishment,  and  are  thoroughly  satisfied  that  an  efficient  system  of 
free  labor  exchanges  established  throughout  the  chief  industrial  centers 
of  this  State  has  proven  a  very  effective  method  of  alleviating  the  suffering 
of  the  unemployed.  For  instance,  in  the  Chicago  offices  alone  we  are  now 
filling  at  the  rate  of  about  8,000  positions  monthly.  Even  should  they 
all  prove  but  temporary,  the  vast  effect  upon  the  public  cannot  be  too 
greatly  appreciated. 

The  Commission  of  Labor  of  the  State  of  Kansas  sends  to 
the  Commission  the  following  in  reply  to  questions  seeking  in- 
formation with  regard  to  the  utility  of  the  public  employment 
office  in  that  State :  — 

The  advantage  to  the  employer  and  employee  will  be  untold  when  a 
system  of  interchange  between  States  operating  public  employment  offices 
is  maintained,  preferably  through  the  Federal  government. 

Our  State  employment  office  saves  both  the  employer  and  employee 
thousands  of  dollars  in  getting  the  two  in  touch  with  each  other. 

The  establishing  of  public  employment  offices  throughout  the  State  is 
the  only  method  of  relieving  the  evils  consequent  to  unemployment. 

The  foregoing  statements  are  typical  of  reports  received  from 
many  other  States  of  the  Union.  They  indicate  a  growing  in- 
terest in  the  work  of  diminishing  unemployment.  The  general 
attitude  toward  the  problem  is  now  one  of  active  concern.  To 
connect  the  industrious  citizen  who  is  out  of  work  with  em- 
ployment is  held  to  be  of  advantage  to  the  individual,  the 
home  and  the  community.  To  carry  on  this  work  is  now  con- 


1917.]  HOUSE  — No.  1850.  119 

sidered  by  the  great  manufacturing  States  of  this  country  as  a 
legitimate  function  of  governmental  activity. 

The  study  and  investigation  of  the  subject  of  unemployment 
in  this  country  has  made  clear  to  our  Commission  the  need  of 
more  constructive  methods  of  dealing  with  this  problem  in 
Massachusetts.  The  statement  to  this  Commission  of  Charles 
F.  Gettemy,  Director  of  the  Bureau  of  Statistics,  is  published  on 
page  295  of  Appendix  C ;  also  a  very  interesting  analysis  of  un- 
employment in  the  organized  industries  of  Massachusetts  from 
1908  to  1916  from  the  same  source  (Appendix  C,  page  277). 
We  believe  the  time  has  come  when  something  must  be  done 
to  increase  the  efficiency  and  opportunities  for  usefulness  of  the 
State  employment  offices  to  the  public.  If  the  management  of 
these  offices  is  to  be  under  the  administration  of  the  director 
of  the  Bureau  of  Statistics,  he  should  not  be  hampered  in  his 
choice  of  important  employees  in  said  offices  by  selection 
through  civil  service,  if  by  so  doing  he  should  find  it  difficult 
to  secure  those  who,  by  temperament  and  personality,  are 
especially  qualified  to  deal  with  persons  seeking  employment. 
The  Commission  realizes  that  tactful  guidance  in  the  placing 
of  these  people  often  spells  the  difference  between  success  or 
failure  in  their  lives. 

We  believe  that  the  statutes  should  provide  for  an  advisory 
council  in  each  city  where  a  State  employment  office  is  estab- 
lished, with  equal  representation  by  employers  and  employees. 
The  functions  of  this  advisory  council  should  include  all  matters 
of  local  administration  that  would  tend  to  make  the  State  office 
efficient  in  administering  to  the  technical  needs  of  employers 
and  workmen  in  given  industries.  We  concur  in  the  recommen- 
dation that  the  State  employment  offices  be  gradually  increased 
to  a  number  sufficient  to  include  all  the  important  industrial 
centers  of  the  Commonwealth.  We  believe  that  their  efficiency 
can  be  improved  so  that  their  capacity  for  usefulness  both  to 
capital  and  labor  may  be  made  productive  of  great  value  to  the 
Commonwealth.  The  utmost  publicity  should  characterize 
their  administration.  In  instances  of  labor  difficulties  it  would 
be  but  just,  and  in  accordance  with  the  spirit  of  Massachusetts 
laws,  to  have  published  statements  relating  to  the  controversy 
placed  at  the  disposal  of  applicants  for  employment.  Public 


120  SOCIAL  INSURANCE.  [Feb. 

service  corporations  which  derive  their  franchises  from  the 
people,  such  as  telephone  or  railroad  corporations,  should  be 
considered  in  the  integral  thought  of  the  prevention  of  unem- 
ployment, and  made  to  give  of  their  services  at  reduced  cost  in 
an  effort  toward  bringing  the  person  out  of  employment  into 
speedy  and  inexpensive  communication  with  those  in  need  of 
labor. 

On  page  299  of  the  Appendix,  the  Commission  reprints  an 
abstract  from  the  remarks  and  recommendations  made  to  the 
Commission  by  H.  J.  Skeffington,  United  States  Commissioner 
of  Immigration.  The  statement  and  suggestions  contained 
therein,  relative  to  new  fields  of  activity  by  the  government  in 
this  direction,  are  worthy  of  careful  consideration  in  connection 
with  our  report,  and  it  would  seem  that  the  State  could,  per- 
haps, co-operate  with  the  national  government  in  this  work 
to  the  good  advantage  of  both. 

While  the  Commission  is  convinced  of  the  practical  and 
immediate  necessity  for  the  establishment  of  State  employment 
offices  in  accordance  with  the  general  methods  here  outlined,  it 
is  also  of  the  belief  that  the  State  should  direct  its  efforts 
further  along  the  lines  of  a  general  constructive  policy  with 
regard  to  this  fundamental  problem.  According  to  the  assump- 
tion of  the  leading  authorities  on  the  subject,  the  more  serious 
periods  of  business  depression  come,  roughly  speaking,  at  inter- 
vals of  ten  years.  We  believe  that  it  is  possible  so  to  plan 
industrial  and  governmental  expenditures  as  to  compensate  for 
decreased  private  employment  during  such  periods  by  the 
scientific  creation  of  an  unemployment  reserve  fund. 

For  the  purpose  of  creating  such  a  reserve  fund  for  the  pay- 
ment of  wages  during  periods  of  business  depression,  it  would  be 
entirely  practicable  to  delay  one-tenth  of  the  permanent^gov- 
ernmental  improvement  expenditures.  This  need  not  entail  a 
uniform  delay  in  all  such  expenditures,  but  would  include  all 
of  some,  none  of  others,  and  a  varying  percentage  of  the  rest. 
The  same  plan  is  equally  applicable  to  railroads  and  other 
great  corporations,  and  should  include  the  purchase  of  equip- 
ment. 

One  of  the  great  contributing  factors  to  the  violent  fluctua- 
tions in  employment  is  the  habit  of  following  the  trend  of  the 


1917.]  HOUSE  —  No.  1850.  121 

general  market,  which  makes  more  pronounced  both  periods  of 
depression  and  prosperity.  Proper  regularization  would  not 
only  tend  to  lessen  the  violence  of  the  fluctuations  in  employ- 
ment, but  would  tend  also  toward  the  elimination  of  the  periods 
of  great  industrial  depressions.  It  would  mean  forestalling  by 
scientific  methods  those  conditions  of  unemployment  which  at 
present  force  the  honest  and  deserving  worker  to  become  the 
recipient  of  charity. 

According  to  Mr.  John  R.  Shillady,  secretary  of  the  mayor's 
committee  on  unemployment  of  New  York,  the  total  amount  of 
public  expenditures  on  improvements,  Federal,  State,  county 
and  municipal,  —  apart  from  current  administrative  and  oper- 
ating expenses  in  1913,  amounted  to  about  $586,500,000. 
(Department  of  Commerce,  Bureau  of  Census,  Report  on 
Wealth,  Debt  and  Taxation,  1913.)  While  this  sum  represents 
expenditures  for  an  enormous  variety  of  undertakings,  it 
represents  but  10.6  per  cent,  of  the  total  cost  payments  made 
by  public  authorities  during  that  year,  which  amount  totaled 
$5,527,000,000.  It  is  true  that  this  reserve  fund  would  reach 
directly  only  certain  industrial  groups,  but  since  it  would  go 
far  toward  preventing  a  general  business  depression  resulting  in 
unemployment,  it  would  indirectly  benefit  all  workers.  This  is 
closely  analogous  to  the  plan  now  in  operation  whereby  the 
Federal  reserve  banks  release,  during  periods  of  financial  de- 
pression, portions  of  reserve  funds  in  their  custody,  making 
investment  capital  available  at  a  time  when,  because  of  lack 
of  confidence  on  the  part  of  the  investing  public,  there  is  a 
restriction  of  circulation. 

Mr.  and  Mrs.  Sydney  Webb,  writing  on  the  prevention  of 
destitution,  say,  "The  very  depression  itself  creates  in  every 
direction  more  depression.  Prevent  it  in  one  industry  and  you, 
to  a  corresponding  extent,  prevent  it  in  others.  Regularization 
of  the  aggregate  would  tend  greatly  to  regularization  of  every 
part  of  the  aggregate."  They  further  suggest  the  printing  of 
the  reports  of  the  British  Historical  Manuscripts  Commission 
and  the  official  history  of  the  South  African  War  as  instances 
of  public  work  which  might  be  reserved  for  years  of  trade 
depression. 

Mr.  Shillady,  whose  estimates  on  unemployment  have  already 


122  SOCIAL  INSURANCE.  [Feb. 

been  quoted,  in  a  comprehensive  paper  on  this  question,  read 
before  a  Conference  of  Charities  and  Correction  at  Indianapolis 
in  1916,  cites  the  possibilities  of  the  working  of  the  plan  by  our 
government  in  the  reclamation  service,  public  buildings,  rivers 
and  harbors,  and  good  roads  developments,  and  further  suggests 
that  the  expenditures  for  "repairs  and  up-keep"  might  well  be 
subject  to  regularization. 

Mr.  Frank  M.  Williams,  State  engineer  and  surveyor  of  New 
York,  stated  it  to  be  his  opinion,  relative  to  regularization  of 
expenditures  for  the  construction  of  the  Erie  Canal  in  that 
State,  that- 

If  yearly  appropriations  were  made  for  the  construction  of  the  Erie 
Canal,  which  would  be  similar  to  the  manner  in  which  the  (national)  gov- 
ernment carries  on  certain  construction  work,  it  might  be  feasible  to  vary 
the  amount  appropriated  each  year  in  acordance  with  the  condition  of 
the  labor  market;  that  is,  when  labor  is  plentiful,  a  larger  appropriation 
would  be  made  than  in  the  years  when  labor  is  scarce. 

This  quotation  is  as  cited  in  Mr.  Shillady's  paper. 

Mr.  Roswell  F.  Phelps,  who  for  twelve  years  has  been  con- 
nected with  the  Massachusetts  Bureau  of  Statistics,  —  a  branch 
of  the  work  of  which  Bureau  has  been  the  collection  and  pub- 
lication of  statistics  of  unemployment,  —  believes  that  the  plan 
of  accumulating  a  reserve  fund  during  years  of  prosperity,  to 
be  used  during  periods  of  depression  in  making  permanent 
improvements,  would  undoubtedly  prove  an  efficient  and 
scientific  method  of  providing  employment  in  times  of  special 
distress.  A  statement  by  Mr.  Phelps  touching  upon  this 
subject  is  published  in  Appendix  C  to  this  report,  page  297. 

Public  construction  here  in  Massachusetts  might  well  come 
under  some  such  form  of  regularization,  which,  combined  with 
the  co-operation  of  large  industries,  would  go  far  towards  pre- 
venting a  repetition  of  the  deplorable  conditions  of  the  winter 
of  1914-15  in  this  Commonwealth.  The  dilatory  habit  of 
waiting  for  a  condition,  and  then,  in  the  midst  of  the  resultant 
distress,  trying  hastily  and  usually  ineffectively  to  remedy  it, 
is  to  be  condemned  as  unscientific  and  wastefully  extravagant. 

There  is  no  similarity  between  a  program  of  scientific  regu- 
larization of  industry  and  the  often  somewhat  hysterical,  though 
well-intentioned,  employing  of  the  unemployed  on  public  works. 


1917.]  HOUSE  —  No.  1850.  123 

The  only  change  in  the  present  procedure  would  be  the  plan- 
ning ahead  for  a  period  of  ten  years  for  industrial  and  govern- 
mental works,  which  would  produce  a  steadying  effect  on  gen- 
eral employment  by  carrying  on^  improvement  plans  in  such 
years  as  the  labor  market  shows  a  slackening  tendency  through 
a  falling  off  in  private  industry.  This  program  aims  to  prevent 
unemployment,  not  to  relieve  it,  and  has  no  relation  whatsoever 
to  public  charity. 

This  is  the  time,  when  unemployment  is  at  a  minimum  be- 
cause of  abnormally  favorable  industrial  conditions,  that  we 
should  deal  with  the  great  problem  of  unemployment  by  the 
inauguration  of  an  unemployment  reserve  fund. 

That  some  such  plan  may  be  carried  out  in  Massachusetts  in 
conjunction  with  our  present  employment  bureaus  and  our 
industries,  and  with  the  co-operation  of  the  Federal  govern- 
ment, we  recommend  that  the  Governor  be  requested  to  ap- 
point as  soon  as  practicable  a  committee,  consisting  of  the 
heads  of  appropriate  departments  of  the  State  government,  to 
consider  the  most  feasible  method  by  which  such  regularization 
may  be  effected,  to  the  end  that  State  expenditures,  upon  more 
or  less  permanent  improvements  and  purchases  of  supplies,  may 
be  so  regulated  as  to  provide  a  maximum  of  employment  in 
years  of  great  business  depression.  We  recommend  that  the 
Governor  appoint  an  advisory  committee  of  twelve,  properly 
representative  of  the  industrial  and  other  interests  concerned, 
to  consult  with  the  committee.  We  recommend  that  said  com- 
mittee report  to  the  Governor  upon  this  subject  six  months 
from  the  date  of  appointment,  and  that  such  report  be  made 
public. 

It  is  clear  to  the  Commission  that  at  the  root  of  the  unem- 
ployment problem  lies  the  curse  of  poverty.  It  is  clear,  also, 
that  not  only  does  unemployment  create  poverty  but  poverty 
in  turn  creates  unemployment.  Poverty  restricts  the  purchas- 
ing power  of  the  worker,  which  reduces  the  demand  for  labor 
and  increases  the  number  of  the  unemployed. 

It  is  necessary,  in  order  best  to  meet  conditions  of  unemploy- 
ment so  as  to  secure  greater  harmony  between  employer  and 
employee,  to  insure  freedom  of  the  worker  through  a  political 
and  industrial  democracy.  The  wage  earner  is  entitled  to  a 
living  wage  and  a  fair  share  of  the  profits  made  from  his  toil. 


124  SOCIAL  INSURANCE.  [Feb. 

The  very  vital  problem  of  dealing  with  the  physically  handi- 
capped should  not  be  ignored.  They  should  receive  hospital  or 
corrective  treatment,  which  in  the  majority  of  cases  would 
result  in  making  efficient  workers  of  these  people,  thereby 
changing  a  State  liability  to  a  State  asset.  Whatever  may  be 
done,  however,  for  the  physically  handicapped  and  for  prevent- 
ing unemployment,  there  will  never  come  a  time  when  all  un- 
employment will  cease  to  exist.  Every  year  industries  fail  and 
thrust  thousands  into  temporary  idleness;  improved  machinery 
displaces  many  more;  and,  even  in  the  best  of  times,  weather 
conditions,  together  with  many  other  unavoidable  causes,  swell 
the  number  to  considerable  proportions. 

It  will  be  observed  in  our  report  on  unemployment  that  there 
are  many  perplexing  problems  which  would  seem  to  require 
permanent  supervision  and  attention.  Constructive  work  in  the 
solving  of  these  problems  can  only  be  accomplished  from  small 
beginnings  and  the  experience  derived  from  continuous  contact 
with  them.  The  matter  of  regularizing  industry,  providing  for 
temporary  relief  during  periods  of  depression,  reducing  the  loss 
of  time  by  the  worker  engaged  in  casual  labor,  and  the  need  of 
governmental  supervision  and  regulation  of  the  State  and  pri- 
vate employment  agencies,  makes  necessary  in  our  opinion  the 
establishment  of  a  State  board  of  employment.  This  board 
should  serve  without  pay  and  should  consist  of  two  employers 
of  labor,  two  representatives  of  employees,  and  a  woman  known 
to  be  interested  in  economic  and  industrial  matters.  It  should 
have  a  paid  secretary,  and  should  be  provided  with  such  sums 
for  expenses  as  the  Legislature  may  deem  proper  for  the  keeping 
of  office  records  and  the  compiling  of  information  necessary  to 
its  development. 

A  bill  incorporating  such  recommendations  as  the  Commis- 
sion makes  in  the  foregoing  paragraphs  will  be  found  in  Ap- 
pendix C,  page  274. 

In  closing  we  quote  from  Carlyle,  the  great  Scotch  historian, 
who,  in  a  few  eloquent  sentences,  touches  the  very  heart  of  the 
subject:  — 

With  the  working  people,  again  it  is  not  so  well.  Unlucky!  For  there 
are  from  twenty  to  twenty-five  millions  of  them.  Whom,  however,  we 
lump  together  into  a  kind  of  dim-compendious  unity,  .  .  .  as  "the 
masses."  Masses  indeed;  and  yet,  singular  to  say,  the  masses  consist  of 


1917.]  HOUSE  —  No.  1850.  125 

units,  .  .  .  every  unit  of  whom  has  his  own  heart  and  sorrows;  stands 
covered  there  with  his  own  skin,  and  if  you  prick  him  he  will  bleed.  Every 
unit  of  these  masses  is  a  miraculous  man,  even  as  thou  thyself  art;  strug- 
gling with  vision  or  with  blindness  for  his  infinite  kingdom  (this  life  which 
he  has  got  once  only  in  the  middle  of  eternities) ;  with  a  spark  of  the  di- 
vinity, what  thou  callest  an  immortal  soul,  in  him. 

Clearly  a  difficult  point  for  government,  that  of  dealing  with  these 
masses;  if  indeed  it  be  not  rather  the  sole  point  and  problem  of  government, 
and  all  other  points  mere  accidental  crochets,  superficialities  and  beatings 
of  the  wind.  For  let  charter  chests,  use  and  wont,  law  common  and  special, 
say  what  they  will,  the  masses  count  to  so  many  millions  of  units  made  to 
all  appearance,  by  the  Creator,  whose  earth  this  is  declared  to  be. 

FRANK  S.  FARNSWORTH. 
ALLISON  G.  CATHERON. 
EDEN  K.  BOWSER. 
HARRY  C.  WOODILL. 
EDWARD  G.  MORRIS. 
WENDELL  P.  THORE. 
JOHN  P.  MEADE. 
EDNA  LAWRENCE  SPENCER. 


While  we  concur  with  the  foregoing  report  that  the  first  step       " 
in  solving  the  problem  of  unemployment  should  be  the  creation 
of  a  network  of  State  employment  bureaus,  we  go  further  and 
advocate  that  this  should  be  followed  by  some  system  of  un-  \^/ 
employment  insurance  when  sufficient  data  and  statistics  are 
available,  through  our  labor  bureaus,  to  make  such  a  law  prop- 
erly efficient  in  solving  the  problem  of  caring  for  the  honest 
worker  during  periods  of  unemployment  without  his  recourse  to 
charity. 

Government  statistics  published  of  the  working  of  the  unem- 
ployment insurance  act  of  England  show  that  during  the  pros- 
perous years  since  the  enactment  of  the  law  this  insurance  has 
in  its  fund  a  surplus  of  over  $5,000,000  which  can  be  used  as 
never  before  in  a  crisis  of  unemployment. 

EDNA  LAWRENCE  SPENCER. 
WENDELL  PHILLIPS  THORE. 


126  SOCIAL  INSURANCE.  [Feb. 


REPORT  RELATIVE  TO  THE  HOURS  OF  LABOR 
IN  CONTINUOUS  INDUSTRIES. 


Chapter  164  of  the  Special  Acts  and  Resolves  of  the  year 
1916  directed  the  Commission,  in  addition  to  considering  the 
subjects  of  sickness,  old  age  and  unemployment  in  the  Com- 
monwealth, to  investigate  the  subject  of  reasonable  restrictions 
in  the  hours  of  labor  in  industries  operated  continuously 
twenty-four  hours.  Pursuant  to  the  directions  contained  in  this 
resolve,  the  Commission  has  given,  in  Boston,  Pittsfield, 
Holyoke  and  Fitchburg,  public  hearings,  which  were  confined 
exclusively  to  the  consideration  of  this  subject.  In  addition, 
the  subject  has  come  in  for  consideration  and  discussion  at 
other  hearings,  especially  at  those  held  in  Lowell,  Worcester 
and  Fall  River. 

A  majority  of  the  members  of  the  Commission  are  unani- 
mous in  their  recommendations  for  legislation  limiting  the 
hours  of  labor  of  tour-workers  in  paper  mills.  Some  of  the 
members  of  the  Commission  go  further,  however,  and  recom- 
mend an  act  extending  the  three-tour  eight-hour  provision  to 
all  so-called  "continuous  industries"  in  the  Commonwealth. 
These  members  believe  it  would  be  discriminating  unfairly  for 
the  Commission  to  select  the  paper  industry  alone  as  the  ob- 
ject of  special  legislation,  without  at  the  same  time  making 
provision  for  any  other  industry  where  similar  conditions  might 
exist. 

Other  members  recommend  a  bill  which  applies  only  to  the 
tour-workers  in  paper  mills,  and  its  provisions  are  very  similar 
to  bills  of  this  character  filed  in  recent  years  with  the  Legis- 
lature by  the  State  Branch  of  the  American  Federation  of  Labor 
and  the  Progressive  party.  The  bill  in  substance  provides  that 
no  person  employed  as  a  tour-worker  in  any  paper  mill  which 
is  in  continuous  operation  day  and  night  shall  be  required, 


1917.]  HOUSE  — No.  1850.  127 

except  in  cases  of  emergency,  to  work  more  than  eight  hours 
in  any  one  day.  A  substantial  fine  is  provided  in  case  of  failure 
to  comply  with  the  provisions  of  the  act,  and  the  duty  of  enforc- 
ing the  act  is  left  to  the  State  Board  of  Labor  and  Industries. 

Other  members,  comprising  a  minority  of  the  Commission, 
recommend  legislation  limiting  the  hours  of  men  employed  in 
industries  running  night  and  day  to  eleven.  Those  members 
who  submit  the  eleven-hour  bill  believe  for  all  practical  purposes 
it  will  accomplish  the  desired  end  and  at  the  same  time,  without 
going  to  what  they  consider  the  extreme  point,  of  specifically 
recommending  the  establishment  of  the  eight-hour  three-shift 
system  in  continuous  industries  not  already  working  under  that 
plan. 

Certain  others,  also  constituting  a  minority  of  the  Commis- 
sion, maintain  that  the  investigation  of  the  Commission  has 
shown  no  such  appeal  or  need  as  to  warrant  at  this  time  legis- 
lative interference  in  the  case  of  any  continuous  industry. 
These  members  deem  it  the  part  of  wisdom  to  leave  the  settle- 
ment of  the  hours  of  labor  in  the  industries  to  the  employers 
and  men  themselves.  It  is  their  belief  that  the  three-tour 
eight-hour  plan  is  being  adopted  by  the  manufacturers  as 
rapidly  as  industrial  and  labor  conditions  will  permit. 

The  several  reports  follow. 


128  SOCIAL  INSURANCE.  [Feb. 


STATEMENT  OF  EDWARD  G.  MORRIS,  WENDELL  P.  THORfi 
AND  EDNA  L.  SPENCER. 

While  we  absolutely  agree  with  the  principle  set  forth  for  the 
protection  of  workers  in  the  regulating  of  the  hours  of  labor  in 
certain  industries  in  House  Bill  No.  429  and  House  Bill  No. 
932,  which  were  before  the  Legislatures  of  1915  and  1916, 
respectively,  each  dealing  with  tour-workers  in  paper  mills,  we 
believe  the  intent  of  that  part  of  the  resolve  which  created  this 
Commission,  and  which  deals  with  "the  restrictions  of  the 
hours  of  labor  in  industries  operated  continuously  for  twenty- 
four  hours,"-  compels  us  to  consider  not  only  the  hours  of  labor 
in  the  paper  mill  industry,  but  also  every  other  industry  where 
the  hours  are  equally  as  long  and  equally  as  oppressive. 

This  part  of  the  resolve  reads :  — 

Resolved,  That  the  special  recess  commission  on  social  insurance  estab- 
lished by  chapter  one  hundred  and  fifty-seven  of  the  resolves  of  the  year 
nineteen  hundred  and  sixteen,  in  addition  to  the  matters  already  referred 
to  said  commission,  shall  study  and  investigate  the  subject  of  reasonable 
restrictions  in  the  hours  of  labor  in  industries  operated  continuously  for 
twenty-four  hours,  and  shall  include  in  its  report  to  the  next  general  court 
such  recommendations  with  drafts  of  proposed  legislation,  as  it  may  deem 
practical  and  expedient.  All  the  provisions  of  said  chapter  shall,  so  far  as 
pertinent,  apply  to  the  investigation  herein  authorized. 

With  the  context  of  this  resolve  in  view,  and  having  in  mind 
the  justice  which  the  problem  demands  in  dealing  fairly  with  all 
workers  who  are,  or  may  be,  compelled  to  come  within  such 
unhealthful  and  demoralizingly  long  hours  of  labor,  we  are  con- 
strained, in  order  to  be  consistent,  to  advocate  the  enactment 
of  a  law  which  will  create  an  eight-hour  day  in  all  industries 
operating  day  and  night,  continuously  or  intermittently,  within 
the  Commonwealth,  except  in  case-  of  emergency,  as  described 
in  section  2  of  the  act  which  we  propose  and  which  is  appended 
hereto. 

The  continued  agitation  to  protect  the  workers  in  the  paper 
industries  from  the  extremely  long  and  unreasonable  hours  of 
the  two-tour  shifts,  which  constitute  practically  a  twelve-hour 
day  and  seventy-two-hour  work  week,  where  such  mills  are 


1917.]  HOUSE  —  No.  1850.  129 

i 

operated  continuously  for  twenty-four  hours,  was  caused  by  the 
absolute  inhumanity,  and  the  danger  to  the  health  and  the 
well-being  of  the  workers.  Such  working  hours  are  intolerable, 
-nothing  less  than  industrial  slavery;  a  condition,  which,  if 
permitted  to  continue,  would  be  a  stain  on  the  name  of  Massa- 
chusetts, whose  record  has  been,  and  should  continue  to  be, 
that  of  a  leader  in  the  world's  industrial  and  humanitarian 
progress. 

Another  reason  that  compels  us  to  include  other  than  the 
paper  industry  in  the  proposed  Jaw  attached  hereto  is  that  we 
believe  that  if  there  are  any  other  industries  which  are  subject- 
ing any  of  their  employees  to  the  same  long,  unreasonable  and 
devitalizing  hours  of  toil,  as  has  been  evidenced  in  the  two- 
tour  shifts  so  bitterly  complained  of  in  the  paper  industry,  we 
must  in  all  fairness  also  include  such  industries  within  the  scope 
of  this  proposed  law.  If  we  restrict  a  law  to  the  paper  industry 
only,  we  could  easily  be  accused  of  unfairly  selecting  one 
industry  for  attack.  This  is  not  our  purpose,  and  thus  it  is 
obvious  that  justice  demands  that  we  treat  all  industries  alike  in 
a  desire  to  protect  all  the  workers  within  the  Commonwealth 
who  are  now  being,  or  who  might  be,  compelled  to  labor,  to 
the  detriment  of  their  health  and  happiness,  more  than  eight 
hours. 

Will  any  citizen  in  Massachusetts  say  that  a  twelve-hour 
work  day  and  a  seventy-two-hour  work  week  should  not  be 
prohibited  by  law,  when  such  long  hours  are  not  only  destruc- 
tive of  the  physical,  moral  and  social  well-being  of  the  workers/ 
and  afford  no  opportunity  for  recreation,  but  also  become  a 
menace  to  the  family  life,  allowing  the  father  little  or  no  time 
to  enjoy  his  wife  and  children? 

Tour-workers  testified  before  this  Commission  to  the  evils  of 
such  conditions  of  labor,  and  the  manufacturers  themselves 
were  not  in  opposition  to  this  testimony.  Organized  labor  tour- 
workers  emphatically  stated  that  they  would  never  return  to  the 
two-tour  system,  which  meant  that  any  attempt  on  the  part  of 
the  manufacturers  at  any  time  to  place  the  hours  on  the  old 
basis  would  be  resisted.  Where  the  Commission  found  paper- 
mill  workers  under  the  two-tour  shifts  at  work,  it  was  informed 
that  it  is  utterly  impossible  for  the  workers  to  continue  under 


130  SOCIAL  INSURANCE.  [Feb. 

such  long  and  oppressive  hours  of  labor.  It  was  further  told 
that  they  were  organizing  to  demand  a  change  to  the  three- 
tour  shifts,  —  the  eight-hour  day. 

While  the  Commission  did  not  have  the  opportunity  to  visit 
other  industries  than  the  paper  industry  where  similarly  long 
hours  were  said  to  exist,  the  common  knowledge  gathered  from 
the  evidence  given  at  the  several  hearings  was  such  as  to  compel 
us  to  ask  that  an  eight-hour  day  law  include  all  industries 
within  its  provisions. 

To  the  credit  of  more  than  90  per  cent,  of  the  paper  manu- 
facturers of  Massachusetts  it  must  be  said  that  they  have 
placed  their  mills  upon  the  three-tour  basis,  making  what  is  to 
all  purposes  an  eight-hour  day  for  each  tour-worker.  Many  of 
these  manufacturers  are  agreed  that  greater  efficiency  is 
obtained  on  the  eight-hour  basis  —  the  three-tour  shifts  —  than 
under  the  twelve-hour  day  of  the  two-tour  shifts,  and  that  the 
three-tour  shifts,  with  this  increased  efficiency,  have  been  suf- 
ficiently productive  to  offset  the  cost  of  the  shorter  hours  — 
the  eight-hour  day  —  given  their  tour-workers.  Many  of  them 
admitted  that  the  two-tour  shift  is  dangerous  to  the  health  and 
well-being  of  the  workers,  but  they  opposed  the  enactment  of 
such  an  eight-hour  day  law  principally  for  two  reasons,  —  first, 
they  held  that,  if  competitive  conditions  arose  outside  of  Massa- 
chusetts, and  the  paper  manufacturers  of  other  States  should 
return  to  the  two-shift  basis,  they  desired  to  be  able  to  do  like- 
wise without  the  interference  of  law;  second,  they  were  positive 
in  their  opposition  to  the  establishment  of  a  legal  eight-hour 
day  in  Massachusetts. 

Both  of  these  contentions  appeared  to  us  to  be  based  upon 
no  just  or  solid  foundation.  The  objection  to  the  establish- 
ment of  an  eight-hour  day  is  not  viewed  by  us  as  a  dangerous 
innovation  and  inimical  to  the  interests  of  the  industries  of  the 
State,  and  we  submit  candidly  for  consideration,  as  upholding 
our  point  of  view,  the  labor  legislation  of  recent  years  in  this 
Commonwealth  lessening  the  hours  of  labor  for  women  and 
minors  in  industries.  These  laws  were  passed  on  broad  human- 
itarian grounds,  and  have  been  a  positive  betterment  for  all 
concerned.  We  know  from  past  experience  that,  when  Massa- 
chusetts enacted  laws  of  this  character,  other  States  were 


1917.]  HOUSE  — No.  1850.  131 

compelled  by  public  opinion  to  enact,  or  voluntarily  proceeded 
to  enact,  similar  legislation,  thus  reducing  the  so-called  danger- 
ous competition  due  to  different  hours  of  labor  to  an  inconse- 
quential minimum. 

We  further  hold  that,  where  the  health  and  happiness  of  the 
workers  are  concerned,  industry  must  shape  its  course  accord- 
ingly, because  industry  in  itself  is  not  the  first  consideration  of 
the  State,  and  must  be  considered  second  to  the  welfare  of  the 
workers. 

While  the  coming  of  the  positive  eight-hour  day  may  be 
temporarily  delayed,  its  merits  are  such  that  they  will  create  a 
momentous  demand  for  it  and  its  embodiment  finally  in  our 
fundamental  law.  If  a  time  should  come,  however,  when 
economic  and  industrial  conditions  would  seem  to  make  neces- 
sary a  return  to  the  two-tour  shift,  —  the  twelve-hour  work 
day,  —  there  would  undoubtedly  be  an  opportunity  to  have 
any  law  which  interfered  with  necessary  needs  modified  or 
repealed. 

At  this  point  it  is  interesting  to  note  what  Mr.  Charles 
Sumner  Bird,  himself  a  paper  manufacturer  of  years'  experience, 
of  the  firm  of  Bird  &  Son,  of  Walpole,  Mass.,  has  to  say  in  a 
letter  to  this  Commission  concerning  the  problem  and  the 
imperative  need  and  justice  of  such  legislation.  Mr.  Bird  said :  — 

In  paper  mills  which  run  twenty-four  hours  continuously,  I  think  that 
the  two-tour  system,  twelve-hour  day,  seventy-two  hour  week  is  intolerable 
and  should  be  stopped  by  the  State.  It  is  a  menace  to  the  workers'  health, 
in  that  thirteen  hours  at  night  and  eleven  hours  during  the  day  are  op- 
pressive, especially  in  those  mills  operating  under  hot  and  moist  condi- 
tions; it  is  a  menace  to  the  welfare  of  the  family  life,  in  that  it  allows  the 
father  little  or  no  time  to  see  and  enjoy  his  wife  and  little  children.  No 
man  who  has  worked  in  a  paper  m  11  seventy-two  hours  a  week  for  any 
considerable  length  of  time  doubts  that  a  two-tour  twelve-hour  per  day 
system  is  deleterious  to  health  and  to  decent  living  conditions. 

The  argument  that  the  eight-hour  or  three-tour  system  will  drive  paper 
mills  out  of  Massachusetts  falls  to  the  ground  in  face  of  the  fact  that  many 
paper  mills  in  Massachusetts,  and  in  the  country,  are  now  on  the  three- 
tour  system.  Fifteen  years  ago  I  put  my  paper  mills  on  the  eight-hour 
system,  and  my  business  is  as  competitive  as  any  I  know  of.  I  doubt 
whether  the  three-tour  system  adds  much  to  the  cost  of  paper,  but  whether 
it  does  or  not  is  of  no  consequence  compared  to  the  importance  of  con- 
serving the  physical  well-being  of  the  workers  now  engaged  in  the  excessive 
hours  prevailing  in  the  two-tour  mills. 


132  SOCIAL  INSURANCE.  [Feb. 

Mr.  Bird  has  stated  to  a  member  of  this  Commission,  more- 
over, that  he  emphatically  favors  the  extension  of  the  eight- 
hour  shift  to  all  industries  operated  continuously  for  twenty- 
four  hours. 

From  statements  made  to  this  Commission  by  the  tour- 
workers  now  working  under  the  eight-hour  system  it  is  evident 
that  they  are  unwilling  to  trust  the  keeping  of  their  present 
eight-hour  day  to  the  decision  of  their  employers  alone.  They 
had  struggled,  they  said,  to  secure  such  conditions  which  they 
are  now  enjoying,  and  they  want  the  limitation  of  their  hours 
of  labor  protected  by  law.  This  appears  to  us  to  be  a  reason- 
able demand,  and  legislation,  accordingly,  should  be  enacted. 
Moreover,  their  side  of  the  case  contained  the  positive  demand 
from  them  that  the  State  protect  their  health  and  well-being. 

There  are  those  who  maintain  that  the  passage  of  such  a  law 
would  have  a  disconcerting  effect  upon  industry.  With  this 
we  do  not  agree,  for  we  are  just  as  sure  that  whatever  protects 
and  advances  the  social  welfare  of  the  workers  must  equally 
advance  the  prosperity  of  any  industry. 

In  some  of  the  hearings  held  by  the  Commission  in  the  sev- 
eral cities  there  was  an  absence  of  workers,  which  might  seem 
to  indicate  that  the  workers  are  not  interested  in  having 
shorter  hours,  although  they  are  working  long  hours  on  the 
two-tour  basis,  —  twelve-hour  day.  But  it  is  commonly 
known  that  workers,  and  especially  the  unorganized,  have  some 
fear  about  appearing  at  hearings  in  opposition  to  their  em- 
ployers, when  their  appearance  before  a  commission  on  such  a 
proposition  might  result  in  the  loss  of  the  family's  bread  and 
butter.  This  absence,  therefore,  should  not  be  construed  to 
emphasize  any  lack  of  interest  on  their  part  in  the  lessening  of 
their  hours  of  labor.  Then  again  we  know  that  few  work- 
ingmen  can  be  as  well  represented  as  their  more  powerful  em- 
ployers. Many  of  them  lack  the  aggressive  confidence  displayed 
by  the  manufacturers  at  such  hearings,  and  it  is  not  to  be 
expected  that  they  can  as  readily  or  as  easily  present  their  cases. 

When  the  fire  prevention  and  health  laws  for  industrial  plants 
were  first  advocated  they  were  opposed  with  the  same  argu- 
ments which  are  now  being  used  against  the  reduction  of  hours 
of  labor  herein  mentioned.  Manufacturers  maintained  it  was 


1917.]  HOUSE  —  No.  1850.  133 

unnecessary  to  have  such  laws,  for  many  of  them  had  put  into 
practice  all  that  these  proposed  laws  required.  Yet  we  believe 
these  laws  of  great  value  in  preventing  a  return  to  dangerous 
conditions.  Having  in  mind  this  preventive  principle,  we 
further  urge  the  enactment  of  our  proposed  law. 

As  always,  when  humanitarian  legislation  of  this  character  is 
proposed,  with  its  prime  purpose  to  conserve  the  health  and 
happiness  of  our  people,  —  of  any  part  of  the  industrial  army,  — 
the  haze  of  unconstitutionality  is  put  forth  to  befog  the  issue, 
to  blind  the  vision  and  to  destroy  the  vital  purpose  and  the 
honest  effort  in  behalf  of  such  just  measures.  The  unconstitu- 
tionality of  any  interference  with  the  contractual  relations 
between  employee  and  employer  is  discussed  and  debated  to  no 
fruitful  end,  for  after  all  we  are  not  the  judges  of  constitutional 
rights  and  cannot  well  believe  that  such  opinions  are  of  value 
from  the  judicial  standpoint.  We  know,  however,  that  it  is 
our  duty,  if  the  evidence  warrants,  —  and  it  has  warranted  it, 
-  to  protect  the  workers  so  that  no  employer  will  be  able  from 
any  motive  to  destroy  the  health  and  happiness  of  a  single 
toiler  in  industry  in  Massachusetts. 

Therefor,  we  recommend  legislation,  as  hereinbefore  outlined, 
for  this  purpose;  and  we  have  faith  that  our  courts,  if  called 
upon  to  deliberate  upon  the  constitutionality  of  the  vital  pur- 
pose of  such  a  law  as  we  propose  for  the  general  welfare,  will 
deal  with  it  with  the  modern  understanding  and  ability  which 
such  a  great  problem  requires.  The  act  which  the  undersigned 
submit  follows. 

EDWARD  G.  MORRIS. 

WENDELL  P.  THORE. 

EDNA  LAWRENCE  SPENCER. 


AN  ACT  TO  REGULATE  THE  HOURS  OF  LABOR  OF  CERTAIN  EMPLOYEES  IN 

INDUSTRIES  OPERATING  DAY  AND  NIGHT. 
Be  it  enacted,  etc.,  as  follows: 

SECTION  1.  No  person  who  is  employed  as  a  worker  in  any  industry 
which  is  in  operation  both  day  and  night,  either  continuously  or  intermit- 
tently, shall,  except  in  case  of  emergency,  be  required,  requested  or  per- 
mitted to  work  more  than  forty-eight  hours  in  any  one  week  or  more  than 
eight  hours  in  any  one  calendar  day. 


134  SOCIAL  INSURANCE.  [Feb. 

SECTION  2.  Only  a  case  of  danger  to  property,  to  life,  to  public  safety 
or  to  public  health  shall  be  considered  a  case  of  emergency  within  the  mean- 
ing of  this  act,  except  in  case  of  employment  for  the  repair,  renewal,  ad- 
justment or  care  of  machinery  or  appliances  in  order  to  maintain  the  same 
in  continuous  operation,  and  except  in  case  of  employment  of  a'  worker  in 
substitution  for  and  in  the  temporary  absence  of  another. 

SECTION  3.  For  the  purpose  of  this  act  the  expression  " worker"  shall 
mean  any  employee  who  tends3  or  is  employed  for  the  purpose  of  tending, 
machinery  or  appliances  of  any  description  which  are  operated  both  day 
and  night,  either  continuously  or  intermittently,  and  shall  be  deemed  to  in- 
clude machine  tenders  and  their  helpers,  cutter  tenders  and  all  other 
persons  whose  attendance  is  required  in  consequence  of  the  continuity  of 
operation  of  such  machinery  or  appliances. 

SECTION  4.  Any  owner,  superintendent  or  other  agent  in  any  such 
industry  who  requires,  requests  or  permits  any  person  therein  employed 
as  a  worker  to  work  more  hours  than  herein  specified  during  any  one  cal- 
endar day  or  during  any  one  week,  except  in  case  of  emergency  as  herein 
defined,  shall  be  punished  by  a  fine  of  not  less  than  fifty  dollars  nor  more 
than  one  hundred  dollars  for  each  offense. 

SECTION  5.  It  shall  be  the  duty  of  the  state  board  of  labor  and  industries 
to  receive  complaints  concerning  alleged  violations  of  this  act,  and  to  make 
or  direct  thereupon  all  needful  and  proper  investigations  and  prosecutions. 

SECTION  6.  This  act  shall  take  effect  upon  the  first  day  of  September 
in  the  year  nineteen  hundred  and  seventeen. 


1917.1  HOUSE  —  No.  1850.  135 


STATEMENT  OF  SENATOR  FARNSWORTH  AND  REPRESENT- 
ATIVE WOODILL. 

The  undersigned,  a  minority  of  the  Commission,  fine!  them- 
selves unable  to  join  with  a  majority  of  the  Commission  in 
recommending  legislation  limiting  the  hours  of  labor  of  em- 
ployees in  the  so-called  "continuous  industries."  They  regret 
that  they  are  unable  to  subscribe  to  the  views  of  the  other 
members  with  reference  to  this  part  of  the  Commission's  report. 
They  are,  however,  in  accord  with  their  associate  members  of 
the  Commission  who  maintain  that  the  hours  of  tour-workers 
in  the  two-shift  paper-making  industries  are  too  long.  They 
heartily  endorse  this  principle  without  any  reservations,  but 
are  decidedly  opposed  to  the  idea  of  recommending  legislation 
at  this  point,  when  practically  all  this  class  of  industries  in 
Massachusetts  have  already  voluntarily  adopted  the  shorter 
hour  plan,  and  in  view  of  the  fact  that  there  is  every  indication 
that  the  other  manufacturers  are  contemplating  such  a  course. 

At  this  point,  with  reference  to  the  recommendations  of  three 
members  of  the  Commission  as  to  a  law  fixing  the  number  of 
hours  of  labor  of  employees  in  every  continuous  industry  in 
the  Commonwealth,  the  undersigned  do  not  regard  legislation 
of  so  broad  a  character  necessary.  They  are  of  the  opinion 
that  it  is  premature,  to  say  the  least,  to  recommend  a  law  so 
far-reaching  in  its  scope.  Outside  the  paper-making  industry 
no  evidence  has  been  presented  to  the  Commission  which  would 
indicate  either  the  existence  of  a  demand  or  justifiable  necessity 
therefor.  Furthermore,  in  view  of  the  fact  that  the  evidence 
presented  to  the  Commission  during  its  study  of  the  hours  of 
labor  in  continuous  industries  deals  wholly  with  the  paper  mills, 
they  will  in  their  statement  confine  themselves  to  a  discussion 
of  that  evidence. 

It  developed  at  the  hearings  held  by  the  Commission  in  the 
principal  paper-making  cities  in  the  State  that  90  per  cent,  of 
the  paper  manufacturers  in  Massachusetts  are  now  operating 
their  mills  on  the  three-tour  eight-hour  basis,  and  that  in  the 
city  of  Holyoke  and  in  other  parts  of  the  State  a  great  number 
of  these  mills  had  adopted  the  shorter  hour  system  since  1912. 


136  SOCIAL  INSURANCE.  [Feb. 

The  undersigned  believe,  after  mature  reflection  and  after 
giving  due  consideration  to  all  statements  made  by  those  who 
appeared  before  the  Commission,  that  most  of  the  manu- 
facturers fully  recognize  the  fact  that  the  shorter  shift  is  the 
better  policy.  The  evidence  submitted  would  further  indicate 
that  they  are  rapidly  putting  their  mills  on  this  working  basis, 
and  it  would  appear  that  it  is  only  a  question  of  time  when  all 
the  paper  mills  in  the  Commonwealth  will  have  put  this  scheme 
into  operation. 

In  their  opinion,  to  pass  a  law  at  this  juncture  in  the  State 
of  Massachusetts,  arbitrarily  fixing  the  number  of  hours  which 
a  man  should  work,  would  be  establishing  a  bad  precedent, 
and  would  be  inexpedient  for  the  reason  that  it  would  be  the 
first  legislation  put  on  the  statute  books  regulating  the  hours 
of  labor  of  men  in  private  industry  in  Massachusetts.  As 
already  stated,  the  manufacturers  are  adopting  the  three-shift 
system  gradually,  and,  it  appears,  as  rapidly  as  industrial  labor 
conditions  will  permit.  It  seems  therefore,  to  be  by  far  the 
better  policy  to  leave  the  adjustment  of  this  matter  to  the 
employers  and  employees.  The  effect  of  enacting  such  laws, 
as  a  majority  of  the  Commission  recommend,  at  this  time  would 
have  a  disturbing  and  disconcerting  effect  upon  industry.  It 
would,  in  the  opinion  of  the  undersigned,  be  an  unwise  inter- 
ference with  the  rights  of  the  employers  and  employees 
mutually  to  agree  on  better  working  hours.  They  believe  also 
that  it  would  be  depriving  the  manufacturers  and  employees  of 
their  constitutional  rights. 

As  stated  in  another  part  of  the  report,  the  Commission  has 
given  more  hearings  on  the  subject  of  restricting  the  hours  in 
continuous  industries  than  on  any  other  one  subject  it  has  had 
to  study.  In  addition  to  seven  hearings,  which  were  announced 
and  fully  advertised  to  deal  exclusively  with  this  subject,  the 
topic  has  come  in  for  discussion  and  consideration  at  several 
other  hearings.  The  public  hearings  given  in  Pittsfield,  Hoi- 
yoke  and  Fitchburg  dealt  entirely  with  the  hours  of  employees 
in  continuous  industries.  These  hearings  were  especially  well 
advertised  in  all  the  local  newspapers,  and  by  promiscuous 
posted  announcements.  Notwithstanding  this  fact,  however, 
and  that  the  Commission  had  arranged  special  evening  hearings 


1917.]  HOUSE  — No.  1850.  137 

for  the  convenience  of  the  tour-workers,  as  well  as  in  the  day- 
time, at  two  of  the  public  evening  hearings  —  in  Pittsfield  and 
Fitchburg  —  no  one  appeared  to  endorse  the  so-called  tour- 
workers'  bill,  nor  to  protest  against  bad  working  conditions  in 
the  mills.  In  the  vicinity  of  Pittsfield  there  are  mills  operating 
on  the  longer  hour  two-shift  system,  and  it  appeared  from 
testimony  given  at  the  Fitchburg  hearing  that  there  are  mills 
in  the  vicinity  of  Fitchburg  also  operating  on  two  shifts.  The 
minority  regards  it  as  rather  significant  that  the  greatest 
demand  for  this  proposed  legislation  should  have  come  from 
the  tour-workers  in  the  city  of  Holyoke,  where  every  mill  is  at 
the  present  time  working  on  the  three-shift  plan.  Since  all  the 
men,  practically,  who  appeared  at  the  evening  hearing  of  the 
Commission  in  the  city  of  Holyoke,  to  endorse  and  recommend 
legislation  establishing  the  three-tour  system  throughout  the 
Commonwealth,  were  union  members,  their  appearance  and 
interest  for  this  particular  legislation  would  appear  to  have  been 
on  the  general  principles  for  which  the  labor  unions  stand.  At 
a  subsequent  hearing  held  in  Boston,  at  the  request  of  a  large 
number  of  manufacturers,  for  the  purpose  of  giving  the  opposi- 
tion a  chance  to  be  heard  further,  some  of  the  same  members 
of  the  Holyoke  Union  were  present,  and  again  appealed  to  the 
Commission  to  recommend  restrictive  legislation. 

The  minority  of  the  Commission  have  gathered  the  impres- 
sion from  much  of  the  testimony  given  at  the  hearings  on  this 
subject  that  in  most  of  the  paper  mills  the  very  best  of  feeling 
exists  at  the  present  time  between  the  manufacturers  and 
workmen.  It  seems  to  these  members  that  the  manufacturers 
have  the  interest  of  their  employees  at  heart  and  are  doing  all 
in  their  power  to  improve  the  working  conditions  and  to  make 
the  mills  attractive  to  them.  They  were  particularly  impressed 
by  the  statements  made  by  certain  of  the  older  mill  owners  as 
to  the  length  of  time  that  many  of  their  employees  had  been 
with  them.  They  believe  this  would  not  be  the  case  if  the 
working  conditions  had  been  as  unsatisfactory  as  some  would 
have  us  believe.  There  were  certain  manufacturers  who  testi- 
fied that  the  passage  of  a  law  requiring  them  at  once  to  change 
over  their  system  of  working  hours  could  only  result  dis- 
astrously. These  men  operate  small  mills  and  do  not  employ 


138  SOCIAL  INSURANCE.  [Feb. 

a  great  number  of  men.  Most  of  their  tour-workers  are  men 
who  have  been  with  them  several  years  and  are  skilled  in  then* 
particular  line,  and  to  obtain  sufficient  additional  help  and  train 
them  in  the  work  would  appear  to  be  rather  difficult,  in  .addi- 
tion to  substantially  increasing  the  operating  expense. 

The  undersigned  are  further  of  the  opinion  that  if  any  legis- 
lation is  required  regulating  the  hours  of  men  in  this  class  of 
industry  it  should  be  national  rather  than  State  legislation.  A 
great  many  of  the  manufacturers  were  questioned  with  regard 
to  this  point,  and  frankly  expressed  themselves  as  not  being 
opposed  to  Federal  legislation  on  this  matter. 

Therefore,  for  the  reasons  above  stated,  the  undersigned 
refrain  from  reporting  any  legislation  at  this  time,  and  beg 
respectfully  to  dissent  from  the  accompanying  reports. 

FRANK  S.  FARNSWORTH. 
HARRY  C.  WOODILL. 


1917.1  HOUSE  — No.  1850.  139 


STATEMENT  OF  JOHN  P.  MEADE  AND  EDWARD  G.  MORRIS. 

We  endorse  the  so-called  three-shift  eight-hour  system  in  all 
industries  operating  continuously,  and  report  a  bill  (Appendix  D, 
page  305)  extending  the  three-tour  system  to  all  paper-making 
industries  operating  continuously  twenty-four  hours  a  day  in 
the  State. 

A  greater  number  of  hearings  have  been  given  on  this  subject 
than  on  any  one  of  the  others  which  the  Commission  had  to 
study.  The  fact  that  so  large  a  number  of  employers  in  the 
paper  industry  have  already  voluntarily  adopted  the  three- 
shift  eight-hour  system,  and  have  found  it  a  practical  method 
of  business,  has  commended  itself  to  us  as  one  of  the  principal 
reasons  for  supporting  such  legislation.  Legislation  of  this 
character  has  been  opposed  by  the  manufacturers  because,  — 

First,  it  would  cripple  their  ability  to  compete  with  out-of- 
State  manufacturers  operating  on  the  two-shift  system,  and  for 
that  reason  they  do  not  approve  of  any  proposed  law  which 
will  prevent  Massachusetts  manufacturers  from  returning  to 
the  two-shift  working  basis. 

Second,  it  would  increase  the  cost  of  production,  and  the  ad- 
ditional labor  required  would  be  difficult  to  find  at  the  present 
time. 

Third,  such  a  bill  would  be  unconstitutional  and  would  take 
away  the  freedom  of  contract. 

Fourth,  legislation  of  this  nature  should  emanate  from  na- 
tional rather  than  State  authority. 

With  regard  to  the  first  objection,  the  Commission  has  in- 
formation from  authoritative  sources  to  support  the  contention 
that  no  substantial  operating  loss  has  resulted  in  paper  mills 
where  the  change  from  the  two-tour  to  the  three-tour  system 
has  been  effected.  On  the  other  hand,  it  was  brought  out  at 
some  of  the  hearings  of  the  Commission  that  efficiency  had  been 
promoted,  and  that  the  immediate  increased  wage  cost  had 
been  almost  if  not  quite  offset,  in  cases  where  industries  had 
changed  to  the  new  shorter  basis.  At  this  point  it  is  significant 
to  observe  that  there  has  been  no  disposition  on  the  part  of  the 
employers  in  any  case  to  return  to  the  old  two-shift  twelve  hour 
a  day  system. 


140  SOCIAL  INSURANCE.  [Feb. 

The  second  objection  has  been  answered  in  part  by  the  above 
paragraph.  With  regard,  moreover,  to  the  problem  of  provid- 
ing extra  labor  in  mills  changing  over  to  the  three-shift  eight- 
hour  plan,  there  has  been  no  substantial  difficulty  in  securing 
the  additional  help  necessary  to  establish  the  change.  As  to 
the  constitutionality  of  such  legislation  and  its  interference 
with  the  freedom  of  contract  between  employer  and  employee, 
—  the  ground  upon  which  the  third  objection  of  the  opposition 
is  made,  —  we  are  of  the  opinion  that  this  question  should  be 
left  to  the  decision  of  the  Legislature  and  the  courts.  We 
would,  however,  respectfully  call  the  attention  of  the  General 
Court  to  labor  legislation  adopted  in  recent  years  affecting  the 
hours  of  women  and  minors  in  industries.  Those  laws  were 
passed  for  health  and  humanitarian  reasons,  and  have  been 
well  enforced  with  good  results.  They  have  not  been  declared 
unconstitutional. 

The  act  which  is  presented  herewith  is  one  readily  adapting 
itself  to  the  different  emergencies  which  arise  in  connection  with 
employment  in  paper  industries.  The  law  is  so  drawn  that  if 
enacted  it  will  in  no  way  interfere  with  the  industries  which 
have  already  adopted  the  eight-hour  shift.  In  addition,  how- 
ever, to  requiring  the  twelve-hour  two-shift  industries  to  adopt 
the  eight-hour  three-shift  system,  it  provides  for  the  continu- 
ation of  the  system  in  plants  already  operating  on  that  basis. 
We  are  of  the  opinion  that  the  evil  of  the  two-tour  plan  is  so 
great  that  the  few  mills  in  the  Commonwealth  operating  under 
it  at  the  present  time  should  be  required,  for  the  good  of  their 
employees,  to  adopt  the  three-tour  plan. 

The  Commission  selected  the  paper-making  industry  more 
specifically  for  its  investigation,  because  for  the  most  part  the 
demand  for  legislation  has  come  through  that  industry.  A  per- 
sonal visit  to  the  mills  by  day  and  at  night  enabled  the  mem- 
bers of  the  Commission  to  see  for  themselves  the  actual  condi- 
tions under  which  some  of  the  so-called  "tour-workers" 
labored.  Evidence  gathered  leads  to  the  conclusion  that  the 
health  and  moral  conditions  of  the  paper  workers  have  improved 
materially  under  the  three-shift  plan.  The  two-tour  system  does 
not  allow  the  worker  sufficient  time  for  recreation.  It  is  not 
conducive  to  the  best  development  of  home  life.  The  hours 


1917.]  HOUSE  — No.  1850.  141 

are  so  long  that  he  is  barely  able  to  find  time  in  which  to  sleep 
and  eat.  There  is  little  if  any  time  for  the  consideration  of 
those  duties  that  are  associated  with  good  citizenship.  There 
seems  to  be  no  question  but  what  there  has  been  an  increased 
efficiency  among  the  employees  where  the  two-tour  system  has 
been  abandoned  in  favor  of  the  three-shift  plan.  We  believe 
that  the  two-shift  system  is  archaic  and  has  little  to  commend 
itself,  and  while  we  fully  recognize  the  disposition  on  the  part 
of  a  majority  of  the  manufacturers  of  the  Commonwealth 
voluntarily  to  adopt  the  eight-hour  plan,  we  strongly  advocate 
the  adoption  of  the  three-shift  eight-hour  system  for  all  the 
tour-workers  in  the  paper  industry  of  Massachusetts. 

A  number  of  workers  who  appeared  at  the  hearings  of  the 
Commission  were  men  who  had  worked  for  a  considerable 
period  of  time  under  both  the  two  and  three  tour  systems. 
Most  of  these  men  were  familiar  with  all  branches  of  paper 
making,  and  had  worked  under  all  condit'ons  existing  in  the 
paper  industries.  We  were  impressed  with  the  intelligence 
displayed  by  the  operatives  who  testified,  and  the  frank  manner 
in  which  they  answered  all  queries  put  to  them.  Striking 
instances  of  decided  improvement  in  the  health  of  workers  who 
had  changed  to  the  three-shift,  shorter  hour  system,  after  hav- 
ing formerly  worked  on  the  two-tour  twelve-hour  schedule, 
were  brought  to  the  attention  of  the  Commission.  It  was 
declared  by  some  of  the  workers  that  they  had  experienced  a 
decided  gain  of  weight  under  the  shorter  hours  of  work,  and 
they  also  maintained  that  they  had  gained  in  strength  and 
vigor,  and  felt  sure  they  were  rendering  better  and  more 
efficient  service  to  their  employers  under  the  new  regime  than 
ever  before.  It  seemed  to  be  the  unanimous  opinion  of  all  the 
operatives  who  were  questioned  by  members  of  the  Commission 
that  under  no  circumstances  would  they  return  to  the  old 
two-tour  plan. 

We  are  aware  that  even  under  the  provisions  of  this  bill  men 
and  women  may  be  employed  more  than  eight  hours  in  paper 
mills  in  other  than  "tour  work,"  and  that  tour-workers,  men 
in  the  prime  of  health,  will  work  eight  hours,  and  women,  not 
tour-workers,  may  work  nine  hours  in  the  same  mill.  We 
recognize,  however,  that  continuous  employment  in  which 


142  SOCIAL  INSURANCE.  [Feb. 

employees  work  during  some  weeks  on  day  shifts  and  during 
other  weeks  on  night  shifts  is  far  more  taxing  than  regular  day 
employment.  It  has  been  found,  further,  in  the  paper  industry, 
that  the  practical  way  to  operate  three  shifts  or  tours  is  to 
divide  the  day  into  three  equal  parts,  which  division  of  neces- 
sity makes  the  shifts  eight  hours  each.  The  fact  that  others, 
not  tour-workers,  work  nine  hours  in  the  same  mill  is  not  a 
sound  argument  against  a  system  of  eight  hours  for  the  "tour- 
workers/*  or  eleven  and  thirteen  hours  as  the  only  alternate 
proposition.  The  shifts  must,  under  present  business  methods, 
be  either  eight-hour  shifts  or  eleven  and  thirteen  hour  shifts, 
and  it  is  of  more  consequence  to  remedy  the  hardship  of  eleven 
and  thirteen  hour  employment  than  to  magnify  the  importance 
of  the  seeming  inequality  in  eight-hour  employment  for  tour- 
workers  and  nine-hour  employment  for  day  workers. 

JOHN  P.  MEADE. 
EDWARD  G.   MORRIS. 


1917.]  HOUSE  — No.  1850.  143 


STATEMENT    OF   ALLISON    G.    CATHERON    AND    EDEN   K. 

BOWSER. 

The  undersigned,  while  uniting  with  the  majority  in  the  opinion 
that  the  two-shift  plan  in  industries  operated  continuously  day 
and  night  results  in  excessive  hours  of  labor  for  certain  employees, 
and  that,  in  the  interest  of  public  welfare,  such  employment 
should  be  prohibited,  do  not  believe  the  correct  remedy  is  one 
limiting  by  express  statement  the  hours  of  labor  to  eight. 

Such  a  proposition  can  only  be  supported  by  evidence  show- 
ing that  it  is  injurious  to  public  health  and  the  general  welfare 
to  work  for  any  period  longer  than  eight  hours  a  day,  as,  for 
instance,  nine  hours.  In  our  opinion  no  evidence  has  been 
submitted  to  this  Commission  that  employment  of  adult  men 
for  a  period  of  nine  hours  a  day  is  mjurious  to  public  health, 
nor  do  we  believe  such  to  be  the  fact.  We  are  satisfied  that 
there  is  sufficient  evidence  to  show  that  employment  for  more 
than  eleven  hours  as  practiced  in  certain  industries  is  excessive 
and  injurious  to  health.  What  the  least  number  of  hours  is 
which  may  properly  be  regarded  as  excessive  we  are  unable  to 
say,  nor  do  we  think  it  necessary  to  determine;  but  we  are 
satisfied  that  ordinary  employment  for  more  than  eleven  hours 
a  day  is  so  excessive  that  it  should  be  forbidden  by  law.  The 
proper  legislative  approach  to  this  problem  we  believe  to  be  to 
forbid  the  thing  which  is  wrong,  namely,  employment  for  a 
period  known  to  be  excessive,  not  to  require  that  hours  be 
limited  to  a  period  which  may  be  considerably  within  the  point 
at  which  excess  begins. 

We  therefore  submit  a  bill  (Appendix  D,  page  304)  in  accord- 
ance w^ith  our  view.  If  such  a  law  is  enacted  it  is  for  the  em- 
ployer to  adjust  his  business  to  conform  to  it.  It  may  be  that 
the  only  practical  way  to  do  this  is  to  adopt  the  three-shift 
plan,  but  such  a  question,  we  submit,  is  within  the  province  of 
the  employer  to  determine. 

In  our  opinion  the  bill  which  we  propose  is  much  more  likely 
than  the  bills  proposed  by  the  majority  to  prove  constitutional, 
and  in  actual  operation  will  secure  quite  as  valuable  results. 

ALLISON   G.    CATHERON. 
EDEN  K.   BOWSER. 


144  SOCIAL  INSURANCE.  [Feb. 


STATEMENT  OF  SENATOR  McLANE. 

I  desire  to  state  my  conclusions,  as  a  member  of  the  Com- 
mission on  Social  Insurance,  in  regard  to  the  problems  presented 
to  the  Commission  for  study  and  report.  In  common  with  the 
citizens  of  this  Commonwealth  I  recognize  that,  without 
further  study  and  investigation,  the  adoption  of  all  the  meas- 
ures presented  by  the  majority  of  the  members  of  this  Commis- 
sion, within  the  limited  and  absolutely  inadequate  time  at  our 
disposal,  would  shake  the  foundation  of  our  social,  political 
and  financial  structure.  In  other  words,  I  regret  that  all  their 
efforts' have  been  devoted  to  building  an  alluring  superstructure 
with  very  little  consideration  given  to  the  foundation. 

Even  though  I  am  in  absolute  sympathy  with  the  object  that 
is  desired  to  be  obtained,  I  maintain  that  no  legislation  on  this 
matter  is  preferable,  by  far,  to  ill-timed,  poorly  considered 
and  hastily  drawn  legislation  .with  leads  —  no  man  knows 
where. 

I  am  emphatically  in  favor  of  a  recommendation  for  the 
adoption  of  the  three-shift,  so-called  "tour-workers"  bill  in 
paper  mills  for  the  health  and  welfare  of  the  employees.  The 
subject-matter  of  this  problem  has  been  carefully  discussed, 
investigated  and  weighed  for  the  past  three  years. 

As  to  non-contributory  old-age  pensions,  while  I  favor  the 
proposition  in  the  large,  I  also  recognize  that  the  importance 
of  the  subject  demands  further  careful  study,  investigation  and 
report,  for  the  following  reasons:  - 

That  the  subject  partakes  of  the  character  of  national  as  well 
as  State  legislation,  and  might  well  be  investigated  jointly,  in 
order  to  co-ordinate  with  the  various  forms  of  relief  and  charity 
now  in  effect  and  with  the  operation  of  the  immigration  and 
naturalization  policy  of  the  Nation. 

That  we  have  not  yet  complete  information  as  to  the  pensions 
now  granted  in  both  State  and  Nation.  There  should  be  a  care- 
ful study  on  this  subject  in  order  to  provide  that  all  inequal- 
ities be  removed  and  yet  no  injustice  be  done  the  individual. 

That  the  question  must  be  first  decided  as  to  whether  the 
granting  of  non-contributory  pensions  is  constitutional  or  not. 
In  this  connection  I  respectfully  refer  to  the  opinion  of  the 


1917.]  HOUSE  —  No.  1850.  145 

justices  of  the  Supreme  Judicial  Court,  186  Mass.  603,  on 
chapter  458  of  1904,  on  a  so-called  bounty  act. 

While  my  sympathy  must  naturally  be  with  any  just  system 
of  relief  for  the  producers  of  the  State,  I  cannot  be  led  astray 
by  the  illusion  that  a  system  of  old-age  pensions,  more  or  less 
restricted,  which  may  operate  fairly  well  in  the  autocratic 
militarism  of  Germany,  and  which  is  questionable  yet  in  the 
democratic  monarchy  of  England,  or  the  system  in  operation 
in  New  Zealand,  which  is  overwhelming  that  country  in  debt, 
is  going  to  fit  itself  automatically  into  the  representative  form 
of  government  in  this  Commonwealth  without  being  a  tremen- 
dous drain  upon  the  laboring  man  in  the  form  of  taxes. 

I  agree  to  a  large  extent  with  the  opinion  voiced  by  our  labor- 
ing men:  "If  this  be  charity,  we  don't  want  it;  if  it  be  increase 
in  wages,  let  us  have  it  now." 

When  the  question  of  health  and  unemployment  insurance 
has  been  properly  studied  and  developed  so  that  our  fundamen- 
tal, economic  structure  may  become  stable  to  the  extent  that 
employment  and  labor  can  be  co-ordinated  in  all  their  stages 
with  existing  conditions,  it  may  be  advisable  to  recommend 
then  that  such  forms  of  insurance  should  be  operated  under 
State,  or  preferably  Federal,  control  and  management. 

As  a  final  word,  it  may  be  opportune  to  suggest  that  this 
Commonwealth  stands  in  the  none  too  favorable  position  of 
having  the  second  largest  debt  in  the  list  of  States,  totaling 
net,  $85,000,000,  —  an  amount  exceeded  only  by  New  York. 
Under  the  conditions  I  cannot  but  emphasize  the  need  for 
further  study  and  the  fullest  investigation  of  all  the  subjects, 
viz.,  health  insurance,  old-age  pensions  and  unemployment, 
before  committing  the  Commonwealth  to  any  plan. 

WALTER  E.  McLANE. 


APPENDICES. 


APPENDIX    A. 


HEALTH  INSURANCE. 

AN  ACT  TO  ESTABLISH  A  SYSTEM  OF  COMPULSORY  INSURANCE  TO  FUR- 
NISH BENEFITS  FOR  EMPLOYEES  IN  CASE  OF  DEATH,  SICKNESS  AND 
ACCIDENT,  NOT  COVERED  BY  WORKMEN'S  COMPENSATION,  AND  FOR 
THEIR  DEPENDENTS  IN  CASE  OF  SICKNESS  AND  ACCIDENT,  AND  TO 

FURNISH  MATERNITY  BENEFITS,  AND  TO  PROVIDE  FOR  CONTRIBUTIONS 

BY  EMPLOYERS,   EMPLOYEES  AND  THE   COMMONWEALTH,   AND  TO 
CREATE  THE  HEALTH  INSURANCE  COMMISSION. 

Be  it  enacted,  etc.,  as  follows: 

PART  I. 

DEFINITIONS  AND   PERSONS   INSURED. 

1  SECTION  1.    Recognizing  that  it  is  necessary  to  provide  proper  care 

2  for  employees  during  sickness  and  pecuniary  support  for  themselves 

3  and  their  families  during  periods  of  inability  to  work  on  account  of 

4  sickness,  in  order  to  prevent  the  spread  of  disease  and  to  protect  the 

5  health  of  the  citizens  of  the  commonwealth,  and  recognizing  that 

6  modern   industrial   and  social   conditions   have   a   part  in   causing 

7  sickness  among  wage  earners,  the  general  court  judges  compulsory 

8  insurance  against  sickness  to  be  for  the  good  and  welfare  of  this  com- 

9  monwealth  and  of  the  citizens  of  the  same. 

Definitions. 

1  SECTION  2.    When  used  in  this  act:  — 

2  "Commission"  means  the  health  insurance  commission. 

3  "Fund"  means  a  local  or  a  trade  fund  as  the  case  may  be. 

4  t     "Society"  means  an  approved  society,  viz.:  a  labor  union,  a  benev- 

5  olent  or  fraternal  society,  or  an  establishment  society,  authorized  to 

6  carry  insurance  under  this  act. 

"Hospital"  includes  sanatorium  unless  otherwise  provided. 
"Insurance"  means  health  insurance  under  this  act. 
9      "  Disability  "  means  inability  to  pursue  the  usual  gainful  occupation. 

10  "Employer"  means  a  person,  partnership,  association,  corporation, 

11  the  legal  representative  of  a  deceased  employer,  or  the  receiver  or 


150  SOCIAL  INSURANCE.  [Feb. 

12  trustee  of  a  person,  partnership,  association  or  corporation  and  the 

13  commonwealth  or  a  municipal  corporation  or  other  political  division 

14  thereof. 

15  " Home-workers"  are  persons  to  whom  articles  or  materials  are 

16  given  out  to  be  made  up,  cleaned,  altered,  ornamented,  finished  or 

17  repaired,  or  adapted  for  sale,  in  the  worker's  own  home,  or  on  premises 

18  not  under  the  control  or  management  of  the  employer.  W  v  *$SJ 

19  "  Earnings  "  shall  include  actual  expenditures  for  or  reasonable  value 

20  of  board,  rent,  housing  and  similar  advantages  given  employees  by 

21  the  employer. 

Compulsory  Insurance. 

1  SECTION  3.    Every  person  employed  in  the  commonwealth,  except 

2  those  receiving  regular  salaries  in  excess  of  one  hundred  dollars  a 

3  month,  unless  exempted  under  section  five  of  this  act,  shall  be  insured 

4  in  a  fund  or  society  as  provided  in  this  act. 

Bailment. 

1  SECTION  4.     For  the  purpose  of  this  act,  any  person  operating  a 

2  vehicle  or  vessel  for  hire,  the  use  of  which  is  obtained  under  a  contract 

3  of  bailment,  in  consideration  of  the  payment  of  a  fixed  sum  or  share 

4  in  the  earnings  or  otherwise,  shall  be  treated  as  an  employed  person 

5  and  the  owner  of  the  vehicle  or  vessel  as  an  employer. 

Persons  Exempt. 

1  SECTION  5.    The  following  persons  shall  be  exempt  from  the  pro- 

2  visions  of  this  act:  employees  of  the  United  States;  employees  of  the 

3  commonwealth  or  of  municipalities  for  whom  adequate  provision  in 

4  time  of  sickness  is  already  made  through  legally  authorized  means; 

5  inmates  of  charitable  or  reformatory  institutions  when  employed  for 

6  the  purposes  of  the  institution,  with  or  without  maintenance,  if  pro- 

7  vision  for  maintenance  and  medical  attendance  during  sickness  is 

8  made;    casual  employees  not  employed  for  the  purpose  of  the  em- 

9  ployee's  trade  or  business;   members  of  the  family  of  the  employer 
10  who  are  not  paid  money  wages. 

Persons  who  may  be  Exempted. 

1  SECTION  6.      The  commission  may  exempt:    home-workers,  who 

2  owing  to  the  irregularity  of  then*  work  or  other  circumstances  con- 

3  nected  with  their  work,  cannot  for  administrative  reasons  be  included 

4  in  the  system  of  insurance;  persons  employed  for  periods  of  not  over 

5  one  week  at  temporary  employment;   members  of  religious  societies 

6  employed  in  nursing,  educational  or  other  activities  of  public  benefit, 

7  who  receive  no  money  compensation. 


1917.1  HOUSE  —  No.  1850.  151 


Voluntary  Insurance. 

1  SECTION  7.     Subject  to  the  conditions  of  this  act,  the  following 

2  persons  may  insure  themselves  voluntarily:    self-employed  persons 

3  whose  earnings  do  not  exceed  one  hundred  dollars  a  month  on  an 

4  average;  persons  formerly  compulsorily  insured  who,  within  one  year 

5  from  the  date  on  which  they  cease  to  be  insured,  apply  for  voluntary 

6  insurance;   members  of  the  family  of  the  employer  who  work  in  his 

7  establishment  without  wages. 

PART  II. 

BENEFITS. 

Cases  in  which  Benefits  paid. 

1  SECTION  1.    Benefits  as  provided  in  this  act  shall  be  paid  or  fur- 

2  nished  in  cases  of  sickness  or  accident,  or  of  death  or  disability  resulting 

3  therefrom,  except  cases  in  which  any  liability  or  compensation  or 

4  other  benefit  is  imposed  by  the  workmen's  compensation  law,  or  in 

5  which  liability  for  damages,  compensation  or  other  benefits  is  imposed 

6  by  any  act  of  congress. 

Reimbursement  of  Fund. 

1  SECTION  2.     If  benefits  in  the  form  of  cash  are  paid  to  any  person 

2  by  any  fund  or  society  under  this  act  in  any  case  under  which  liability 

3  for  compensation  exists  under  the  workmen's  compensation  law,  such 

4  fund  or  society  shall  to  the  extent  of  such  benefits  be  entitled  to 

5  reimbursement  out  of  such  compensation,  and  upon  notice  to  the 

6  carrier  under  the  workmen's  compensation  law  the  claim  for  reim- 

7  bursement  shall  be  a  lien  upon  the  compensation.     If  other  benefits 

8  are  furnished  by  the  fund  or  society  in  such  a  case  it  shall,  to  the 

9  extent  of  the  actual  expenses  incurred  in  furnishing  such  benefits,  be 

10  subrogated  to  the  right  of  the  employee  or  of  the  person  furnishing 

11  such  benefits  to  reimbursement  therefor  under  the  workmen's  com- 

12  pensation  law.    When  treatment  in  such  case  has  been  begun  by  or 

13  through  a  fund  or  society  the  care  of  the  case  shall  not  be  transferred 

14  to  the  carrier  under  the  workmen's  compensation  law  except  upon 

15  the  request  of  such  carrier. 

Minimum  Benefits. 

1  SECTION  3.    Every  fund  or  .society  must  provide  for  its  insured 

2  members  as  minimum  benefits:  medical,  surgical,  dental  and  nursing 

3  attendance  and  treatment;   medicines  and  medical  and  surgical  sup- 

4  plies;   sickness  benefit  to  the  insured  person  or  the  dependent  mem- 

5  bers  of  his  family;    maternity  benefit;    funeral  benefit;    medical, 


152  SOCIAL  INSURANCE.  [Feb. 

6  surgical  and  nursing  attendance  and  medicines,  and  medical  and  sur- 

7  gical  supplies,  for  dependent  members  of  their  families. 

Beginning  of  Right. 

1  SECTION  4.    The  right  to  benefits,  with  the  exception  of  maternity 

2  benefit,  begins  with  the  day  of  membership.    The  maternity  benefit 

3  shall  be  payable  to  any  woman  insured  against  sickness  for  at  least 

4  nine  months  during  the  twelve  months  preceding  the  confinement, 

5  to  the  wife  of  any  man  so  insured,  and,  as  respects  confinement  for  a 

6  child  of  her  husband,  to  the  widow  of  any  man  insured  for  at  least 

7  nine  months  during  the  twelve  months  preceding  his  death. 

Medical,  Surgical,  Dental  and  Nursing  Attendance  and  Treatment. 

1  SECTION  5.    All  necessary  medical,  surgical,  and  nursing  attendance 

2  and  treatment  shall  be  furnished  by  the  fund  or  society  to  insured 

3  persons  and  the  dependent  members  of  their  families,  from  the  first 

4  day  of  sickness  or  the  happening  of  an  accident,  provided  notice  has 

5  been  given;   otherwise  from  the  date  of  such  notice.    In  case  of  dis- 

6  ability  such  attendance  and  treatment  shall  not  be  furnished  to  the 

7  same  person  for  more  than  twenty-six  weeks  of  disability  in  any 

8  consecutive  twelve  months.    All  urgently  necessary  dental  services 

9  shall  be  furnished  to  insured  persons,  by  the  fund  or  society.    In  case 

10  the  fund  or  society  is  unable  to  furnish  the  whole  or  any  part  of  the 

11  benefit  provided  in  this  section,  it  shall  pay  the  cost  of  such  service 

12  actually  rendered  by  competent  persons  at  a  rate  approved  by  the 

13  commission. 

Medical  and  Surgical  Service. 

1  SECTION  6.    The  fund  or  society,  subject  to  the  approval  of  the 

2  commission,  and  to  provisions  of  part  five,  section  seventeen,  of  this 

3  act,  shall  make  arrangements  for  medical  and  surgical  attendance 

4  and  treatment  by  means  of  either : 

5  1.  A  panel  of  physicians  to  which  all  legally  qualified  physicians, 

6  surgeons,  hospitals,  dispensaries  and  associations  of  legally  qualified 

7  physicians  and  surgeons,  shall  have  the  right  to  belong,  and  from 

8  among  whom  the  patients  shall  have  free  choice,  subject  to  the  right 

9  of  the  physician  or  surgeon  to  refuse  patients  on  grounds  specified  in 

10  regulations  made  under  this  act:   provided,  that  the  commission,  on 

11  the  recommendation  of  the  medical  advisory  board,  may  limit  in  the 

12  interests  of  the  medical  service  the  maximum  number  of  patients  to 

13  be  allowed  a  panel  physician.    Such  maximum  may  vary  in  different 

14  districts.    The  payment  of  panel  physicians  shall  be  upon  a  visitation 
15J>asis. 

16  j    2.  On  request  of  a  fund  or  society,  this  commission,  with  the  ap- 

17  proval  of  the  medical  advisory  board,  may  permit  in  combination 

18  with  the  panel  system  the  employment  of  legally  qualified  physicians 


1917.]  HOUSE  — No.  1850.  153 

19  on  salary:    provided,  that  freedom  of  choice  by  the  insured  persons 

20  among  salaried  and  panel  physicians  be  maintained. 

Nursing  Service. 

1  SECTION  7.    The  fund  or  society,  subject  to  the  approval  of  the 

2  commission,  shall  make  arrangements  with  nurses,  dispensaries,  hos- 

3  pitals  or  nursing  organizations,  for  nursing  attendance  and  treatment. 

Laboratory  Facilities  and  Specialists. 

1  SECTION  8.    The  fund  or  society  shall  provide  proper  laboratory 

2  and  other  facilities  for  diagnosis  and  treatment,   and  shall  make 

3  arrangements  with  specialists,  including  dentists,  for  consultations, 

4  treatments,  and  operations. 

Medical  and  Surgical  Supplies. 

1  SECTION  9.     Insured  persons  and  the  dependent  members  of  their 

2  families  shall  be  supplied  with  all  necessary  medicines,  medical  and 

3  surgical  supplies,  dressings,  eyeglasses,  trusses,  crutches  and  similar 

4  appliances  prescribed  by  the  physician  or  surgeon.    The  supplies 

5  under  this  section  shall  not  in  any  one  year  exceed  fifty  dollars  for 

6  an  insured  person  and  the  dependent  members  of  his  family. 

Hospital  Treatment. 

1  SECTION  10.    Hospital  or  sanatorium  treatment  and  maintenance 

2  shall  be  furnished,  upon  the  approval  of  the  medical  officer  of  the  fund 

3  or  society,  instead  of  all  other  benefits  (except  as  provided  in  Part  II, 

4  sections  eighteen,  twenty-three  and  twenty-eight)  with  the  consent 

5  of  the. insured  member,  or  that  of  his  family  when  it  is  not  practicable 

6  to  obtain  his  consent.    The  fund  or  society  may  demand  that  such 

7  treatment  and  maintenance  be  accepted  when  required  by  the  con- 

8  tagious  nature  of  the  disease,  or  when  in  the  opinion  of  its  medical 

9  officer  such  treatment  is  imperative  for  the  proper  treatment  of  the 

10  disease  or  for  the  proper  control  of  the  patient.     Sickness  benefit  may 

11  be  discontinued  (except  as  provided  in  Part  II,  section  eighteen) 

12  during  refusal  to  submit  to  hospital  or  sanatorium  treatment.    Such 

13  treatment  shall  be  furnished  during  the  period  for  which  sickness 

14  benefit  is  payable,  and  shall  be  provided  in  a  hospital  or  sanatorium 

15  with  which  the  fund  or  society  has  made  satisfactory  financial  arrange- 

16  ments  approved  by  the  commission,  or  in  one  erected  and  maintained 

17  by  the  funds  and  societies  with  the  approval  of  the  commission. 

Medical  Officers. 

1  SECTION  11.    Each  fund  or  society  shall  employ  at  least  one  med- 

2  ical  officer,  who  shall  be  a  legally  qualified  physician  and  possess  such 

3  other  qualifications  as  the  medical  advisory  board  may  prescribe. 


154  SOCIAL  INSURANCE.  [Feb. 

4  The  appointment  of  a  medical  officer  shall  be  subject  to  the  approval 

5  of  the  local  medical  committee,  but  in  case  of  failure  or  refusal  to 

6  approve  an  appeal  may  be  taken  to  the  medical  advisory  board, 

7  whose  decision  shall  be  final.     No  medical  officer  shall  practice  in 

8  any  other  capacity  under  this  act. 

Duties  of  Medical  Officers. 

1  SECTION  12.    A  medical  officer  shall  make  such  inspections  and 

2  reports  as  the  local  medical  committee  shall  direct,  which  reports, 

3  if  of  violation  of  sanitary  laws,  ordinances  or  regulations,  and  all 

4  other  reports  required  by  the  health  authorities,  shall  be  forwarded 

5  by  the  health  officer  upon  such  committee  to  the  proper  health  au- 

6  thority;  and,  upon  charges  of  failure  or  neglect  to  make  such  inspec- 

7  tions  or  reports  a  medical  officer  may  be  removed  by  the  arbitration 

8  committee  after  a  hearing.    The  decision  of  the  arbitration  com- 

9  mittee  shall  be  final. 

Local  Medical  Committee. 

1  SECTION  13.    There  shall  be  in  each  district  formed  in  accordance 

2  with  Part  IV,  section  one,  and  in  which  there  is  a  panel,  a  local  med- 

3  ical  committee  of  not  less  than  seven  or  more  than  fifteen  members. 

4  The  commissioner  of  health  in  each  city  in  which  there  is  a  com- 

5  missioner  of  health,  or  local  health  officer  elsewhere,  shall  serve  or 

6  appoint  a  member  of  his  staff,  who  shall  be  a  physician,  as  a  member 

7  of  the  local  medical  committee  of  each  district  within  his  jurisdiction. 

8  The  other  members  shall  be  legally  qualified  physicians  and  shall  be 

9  elected  for  terms  of  three  years,  part  by  the  physicians  on  the  panel 

10  of  the  funds  in  the  district,  part  by  the  staffs  of  attending  pltysicians 

11  and  surgeons  of  the  hospitals  which  have  made  agreements  with  funds 

12  in  the  district  to  treat  insured  persons.    The  commission,  subject  to 

13  the  approval  of  the  medical  advisory  board,  shall  determine,  the  pro- 

14  portion  of  members  of  the  local  medical  committee  to  be  elected  by 

15  the  panel  physicians  and  by  the  attending  physicians  and  surgeons  of 

16  said  hospitals.     The  committee  shall  elect  its  own  officers  and  shall 

17  serve  without  compensation. 

Meetings  of  the  Committee. 

1  SECTION  14.    The  committee  shall  meet  at  least  once  every  month 

2  and  may  be  called  together  at  any  tune  on  three  days'  notice  by  the 

3  chairman  or  by  a  call  signed  by  five  members.     A  majority  of  the 

4  members  of  the  committee  shall  constitute  a  quorum. 

Powers  and  Duties  of  the  Committee. 

1  SECTION  15.    All  regulations  and  contracts  affecting  medical,  sur- 

2  gical  nursing  or  dental  attendance  and  treatment  made  by  the  board 

3  of  directors  of  a  fund  or  society  shall  be  submitted  to  the  local  medical 


1917.J  HOUSE  —  No.  1850. 

4  committee  of  its  district,  and  shall  not  take  effect  until  after  the  next 

5  regular  meeting  of  the  committee,  unless  sooner  acted  upon  by  the 

6  committee,  except  that  the  board  may  issue  temporary  regulations  for 

7  the  period  of  three  months.    Any  dispute  in  regard  to  such  attendance 

8  or  treatment  or  any  charge  brought  against  a  physician  because  of 

9  his  work  for  a  fund  or  society  shall  be  referred  to  the  local  medical 
10  committee  of  the  district  before  action  is  taken  by  the  board  of  di- 
ll rectors.     If  the  committee  and  the  board  of  directors  cannot  agree, 
12  the  matter  shall  be  referred  to  the  arbitration  committee. 

Arbitration  Committee. 

1  SECTION  16.    Any  dispute  between  a  fund  or  society  and  a  physi- 

2  cian,  or  any  dispute  submitted  as  provided  in  Part  II,  section  fifteen, 

3  shall  be  referred  to  an  arbitration  committee,  one  member  appointed 

4  by  the  board  of  directors  of  the  fund,  one  member  appointed  by  the 

5  local  medical  committee,  and  a  third  member,  who  shall  be  chairman, 

6  appointed  by  a  judge  of  the  superior  court  or  by  a  justice  of  the  su- 

7  preme  court  in  counties  in  which  there  is  no  county  court.    The 

8  decision  of  the  arbitration  committee  shall  be  final  unless  an  appeal  is 

9  taken  to  the  commission  within  ten  days  from  the  date  on  which  the 
10  decision  is  rendered. 

Sickness  Benefit. 

1  SECTION  17.    A  sickness  benefit,  equal  to  two  thirds  (sixty-six  and 

2  two  thirds  per  cent)  of  the  weekly  earnings  of  the  insured  member, 

3  shall  be  paid  beginning  with  the  fourth  day  of  disability  on  account  of 

4  illness  or  accident.     It  shall  be  paid  only  during  continuance  of  dis- 

5  ability,  and  shall  not  be  paid  to  the  same  person  for  a  period  of  over 

6  twenty-six  weeks  in  any  consecutive  twelve  months.    This  benefit 

7  shall  be  paid  to  an  insured  woman  when  disabled  on  account  of  preg- 

8  nancy,  except  that  it  shall  not  be  paid  to  her  during  the  period  when 

9  she  is  receiving  cash  maternity  benefit.     The  weeks  during  which 

10  sickness  benefit  is  discontinued  because  of  refusal  to  accept  hospital 

11  treatment  shall  be  included  in  computing  the  period  of  twenty-six 

12  weeks. 

Sickness  Benefit  to  Dependents. 

1  SECTION  18.    A  sickness  benefit  equal  to  one  half  (fifty  per  cent) 

2  of  the  earnings  of  the  insured  member  shall  be  paid  to  his  family,  if 

3  any,  or  other  dependents,  if  any,  while  he  is  in  a  hospital,  sanatorium, 

4  or  other  institution  or  while  he  refuses  to  submit  to  treatment. 

Certificate  of  Disability. 

1  SECTION  19.    A  certificate  of  disability  shall  be  issued  only  by  a 

2  medical  officer,  and  only  after  his  personal  examination  of  the  patient 

3  and  upon  a  statement  by  the  attending  physician,  if  any.     Sickness 

4  benefits  shall  be  paid  only  upon  a  certificate  of  disability.    A  medical 


156  SOCIAL  INSURANCE.  [Feb. 

5  officer  may  visit  at  any  time  persons  recommended  for  or  receiving 

6  sickness  benefits. 

Computation  of  Benefits. 

1  SECTION  20.    For  the  purpose  of  computing  the  sickness  benefit, 

2  weekly  earnings  shall  be  taken  as  the  earnings  during  the  last  six  days 

3  on  which  the  employee  worked  full  time  preceding  disability,  not 

4  including  earnings  for  overtime,  unless  such  overtime  is  a  regular 

5  occurrence  in  the  employment;    but  if  this  computation  would  be 

6  unfair  to  the  employee,  his  weekly  earnings  shall  be  taken  as  six 

7  times  his  average  daily  earnings  for  the  days  actually  employed  at 

8  full  time  during  the  three  months  preceding  disability. 

Periods  of  Payment. 

1  SECTION  21.    Sickness  benefit  shall  be  paid  weekly  where  possible, 

2  and  in  no  case  less  frequently  than  semi-monthly. 

Maternity  Benefit. 

1  SECTION  22.    Maternity  benefit  shall  consist  of:  all  necessary  med- 

2  ical,  surgical,  nursing  and  obstetrical  aid,  materials  and  appliances, 

3  which  shall  be  given  insured  women  and  the  wives  and  widows  of 

4  insured  men.    A  weekly  maternity  benefit,  which  shall  be  payable  to 

5  insured  women  only,  equal  to  the  regular  sickness  benefit  of  the  in- 

6  sured,  for  a  period  of  eight  weeks,  of  which  at  least  six  shall  be  sub- 

7  sequent  to  delivery,  on  condition  that  the  beneficiary  abstain  from 

8  gainful  employment  during  the  period  of  payment.    Benefits  under 

9  this  section  shall  be  in  addition  to  all  other  benefits  under  this  act. 


Funeral  Benefits. 

1  SECTION  23.    The  fund  or  society  shall  pay  the  actual  expenses  of 

2  the  funeral  and  burial  of  a  deceased  insured  member,  as  arranged  for 

3  by  the  family  or  next  of  kin,  or  in  absence  of  such  by  the  officers  of 

4  the  fund  or  society,  up  to  the  amount  of  one  hundred  dollars.    This 

5  benefit  shall  be  paid  in  case  of  death  of  a  former  insured  member 

6  within  six  months  after  discontinuance  of  sickness  benefits  because  of 

7  the  exhaustion  of  the  time  limit,  provided  he  has  not,  within  those 

8  six  months,  become  insured  in  another  fund  or  society. 

Assignments  and  Exemptions. 

1  SECTION  24.    Claims  for  benefits  under  this  act  shall  not  be  assigned, 

2  released  or  commuted,  and  shall  be  exempt  from  all  claims  of  creditors 

3  and  from  levy,  execution  and  attachment  or  other  remedy  for  recovery 

4  or  collection  of  a  debt,  which  exemption  may  not  be  waived.    Benefits 

5  shall  be  paid  only  to  the  person  or  persons  entitled  to  receive  the  same, 


1917.]  HOUSE  —  No.  1850.  157 

6  or  to  some  person  who  is  liable  by  law  or  in  fact  for  the  support  of 

7  such  person  or  persons. 

Additional  Benefits. 

1  SECTION  25.    A  fund  or  society  may  grant  the  following  additional 

2  or  increased  benefits  if  the  commission  be  satisfied  that  its  income  is 

3  sufficient  for  the  purpose:    (a)  extension  of  sickness  benefit  to  exceed 

4  twenty-six  weeks  but  not  to  exceed  fifty-two  weeks;   (6)  funeral  bene- 

5  fits  for  members  of  the  family;    (c)  increased  amount  allowed  for 

6  medical  and  surgical  supplies  and  appliances;    (d)  increase  in  the 

7  period  of  extended  insurance;    (e)  dental  work  in  addition  to  that 

8  provided  under  Part  II,  section  five,  either  up  to  a  certain  amount 

9  per  year  or  by  contribution  of  part  of  the  cost. 

Extension  of  Insurance. 

1  SECTION  26.    When  contributions  cease  on  account  of  unemploy- 

2  ment  not  due  to  sickness,  right  to  benefit  under  this  act  shall  continue 

3  in  force  for  one  week  if  the  insured  person  has  paid  contributions 

4  during  four  weeks  immediately  preceding  unemployment,  and  for  an 

5  additional  week  for  each  additional  four  weeks  of  paid  up  membership 

6  during  the  twenty-six  weeks  immediately  preceding  unemployment. 

Prevention  of  Disease. 

1  SECTION  27.    Funds  or  societies,  may,  with  the  consent  of  the 

2  commission,  and  for  purposes  approved  by  the  appropriate  local  or 

3  state  public  health  authorities,  make  appropriations  for  prevention  of 

4  disease  and  the  education  of  its  employer  and  employee  members  in 

5  disease  prevention  and  hygiene,  and  include  the  amount  so  appro- 

6  priated  among  its  expenses  of  administration. 


PART  III. 

CONTRIBUTIONS. 

Apportionment  of  Contributions. 

1      SECTION  1.    The  full  cost  of  insurance  provided  by  this  act,  in- 
.2  eluding  contributions  to  the  reserve  and  to  the  guarantee  fund,  shall 

3  be  borne  by  employers,  employees  and  the  commonwealth  in  the 

4  following  proportions:    employers,  two  fifths;    employees,  two  fifths, 

5  and  the  commonwealth,  one  fifth,  except  as  provided  in  section  two. 

Contributions  of  Low-paid  Workers. 

1  SECTION  2.     If  the  earnings  of  insured  persons  are  less  than  nine 

2  dollars  a  week  the  shares  of  the  employer  and  employee  of  the  amount 

3  paid  by  them  jointly  shall  be  in  the  proportions  indicated  in  the  fol- 

4  lowing  table : 


158 


SOCIAL  INSURANCE. 


[Feb. 


IF  EABNINGS  ABE  UNDER  — 

BUT  NOT  UNDER  — 

Employer. 

Employees. 

$9  

$8,      

60% 

40% 

8,         .                

7  

70% 

30% 

7,         

6  

80% 

20% 

6,         .        

5  

90% 

10% 

5 

100% 

0% 

5  The  contribution  of  the  commonwealth  shall  remain  one  fifth  of 

6  the  total. 

Amount  of  Contributions. 

1  SECTION  3.    The  amount  of  the  contributions  shall  be  computed 

2  so  as  to  be  sufficient  for  the  payment  of  benefits,  the  expense  of  ad- 

3  ministration  of  the  fund  and  its  reserve,  and  the  maintenance  of  the 

4  guarantee  fund. 

Payment  of  Contribution. 

1  SECTION  4.    Every  employer  shall,  on  the  date  on  which  he  pays 

2  his  employees,  or  at  least  monthly,  pay  to  any  local  or  trade  fund  the 

3  total  contributions  due  from  him  and  from  his  employees  to  such 

4  fund.    If  such  contribution  is  made  at  such  time,  he  may  deduct 
.  5  from  the  earnings  of  any  employee  the  share  of  that  employee  in  the 

6  contribution,  which  shall  be  in  proportion  to  his  earnings,  but  must 

7  inform  him,  in  a  method  to  be  approved  by  the  commission,  of  the 

8  amount  so  deducted.    Approved  societies  shall  provide  by  regula- 

9  tion,  to  be  approved  by  the  commission,  for  the  payment  of  contri- 

10  butions  by  their  members.    The  employer  of  each  such  member  shall 

11  be  excused  from  contributing  in  respect  to  him  to  the  local  or  trade 

12  fund,  as  above  provided,  only  upon  proof  that  such  contributions  to 

13  an  approved  society  have  been  duly  made  in  respect  to  such  member, 

14  and  not  otherwise. 

Rates  of  Contributions. 

1  SECTION  5.    In  funds  in  which  employees  in  several  industries  are 

2  insured,  contributions  may  be  fixed  at  different  amounts  for  different 

3  industries  according  to  the  degree  of  sickness  hazard  in  those  industries, 

4  and  shall  be  so  fixed  if  the  commission  finds  a  substantial  difference 

5  in  the  degree  of  sickness  hazard. 


Establishments  with  Excessive  Rates  of  Sickness. 

1  SECTION   6.     If   the   establishment   of   any   employer  shows   an 

2  excessive  rate  of  sickness,  a  fund  may,  subject  to  the  approval  of  the 

3  commission,  increase  the  rate  of  contribution  of  such  employer  in 


1917.]  HOUSE  —  No.  1850.  159 

4  proportion  to  the  excess  of  such  rate  of  sickness  above  the  normal 

5  rate.    Sucn  additional  contributions  shall  be  paid  by  the  employer 

6  without  the  right  of  deducting  from  the  earnings  of  his  emp^ees. 


PART  IV. 

CARRIERS. 

Division  of  the  Commonwealth  into  Districts. 

1  SECTION  1.    The  commission  shall,  within  six  months  after  this 

2  act  goes  into  effect,  divide  the  commonwealth  into  districts,  no  one 

3  of  which  shall  contain  less  than  five  thousand  persons  subject  to 

4  compulsory  insurance. 

Establishments  of  Fund. 

1  SECTION   2.    The   commission   shall,   before  April   first,   nineteen 

2  hundred  and  eighteen,  hold  one  or  more  hearings  in  each  district, 

3  notice  of  which  shall  be  given  by  advertisement  in  at  least  one  news- 

4  paper  published  in  the  district  and  by  any  other  method  approved  by 

5  the  commission,  and  shall  thereafter  establish  one  or  more  funds,  and 

6  in  their  discretion  may  establish  one  or  more  trade  funds  in  such 

7  district.    The  commission  shall  then  provide  in  each  district  for  the 

8  election  of  delegates,  half  of  whom  shall  be  elected  by  employers,  half 

9  by  employees  affected,  to  conventions  for  each  fund  which  shall  have 

10  power  to  adopt  constitutions.    The  expense  of  the  elections  and  con- 

11  ventions  shall  be  paid  by  the  commonwealth  as  expenses  of  the  com- 

12  mission  are  paid. 

Consolidation  or  Division  of  District. 

1  SECTION  3.    The  commission  at  any  time  on  its  own  motion  or  on 

2  the  petition  of  the  board  of  directors  of  any  local  or  trade  fund  may 

3  consolidate  two  or  more  districts  or  detach  a  territory  from  one  dis- 

4  trict  and  annex  it  to  another,  or  create  a  new  district  from  parts  of 

5  several  districts  or  from  one  district,  already  in  existence,  and  shall 

6  make  such  disposition  of  the  property  of  the  dissolved  fund  as  shall 

7  seem  to  it  proper. 

Establishment  of  Trade  Fund. 
*1       SECTION  4.     On  application  of  employers  whose  principal  place  of 

2  business  or  establishments  are  within  the  same  district,  and  who 

3  employ  two  hundred  and  fifty  employees  in  the  same  trade  or  branch 

4  of  a  trade,  or  on  the  application  of  two  hundred  and  fifty  employees 

5  employed  in  the  same  trade  by  employers  whose  principal  places  of 

6  business  or  establishments  are  within  the  same  district,  the  commis- 

7  sion,  after  a  hearing  within  the  district,  which  shall  be  duly  advertised 


160  SOCIAL  INSURANCE.  [Feb. 

8  and  notice  of  which  shall  be  sent  to  the  boards  of  directors  of  the  local 

9  and  trade  funds  within  the  district,  may  authorize  the  formation  of 

10  a  trade  fund,  if  there  be  no  other  trade  fund  within  the  district  for 

11  the  trade  or  the  branch  of  the  trade,  and  if  the  establishment  of  the 

12  new  fund  will  not  impair  the  solvency  of  any  local  or  trade  fund  in 

13  the  district.    The  new  fund  shall  receive  a  proportionate  share,  to  be 

14  determined  by  the  commission,  of  the  reserve  and  other  property  of 

15  each  fund  to  which  any  of  its  insured  members  belong  at  the  time  of 

16  becoming  members  of  the  new  fund. 

Temporary  Establishment  Society. 

1  SECTION  5.    If  a  sufficient  number  of  persons  are  employed  tem- 

2  porarily,  the  commission,  of  its  own  motion,  or  on  the  application  of 

3  the  board  of  directors  of  any  fund  affected,  may  order  the  creation  of 

4  an  establishment  society  for  the  duration  of  the  work.    The  com- 

5  mission  shall  divide  any  surplus  left  in  such  fund  between  the  em- 

6  ployers  and  employees  in  proportion  to  the  amount  of  their  contribution 

7  after  having  provided  for  all  the  obligations  of  the  fund. 

Authorization  by  Commission. 

1  SECTION  6.    No  fund  shall  begin  business  until  it  is  authorized  by 

2  the  commission.    The  commission  shall  authorize  a  fund  only  after  ap- 

3  proval  and  filing  of  its  constitution  and  after  the  names  and  addresses 

4  of  the  board  of  directors  elected  for  the  first  year  have  been  filed  with 

5  the  commission. 

Dissolution  of  Fund. 

1  SECTION  7.     The  commission  may,  after  a  hearing  in  the  district 

2  for  which  a  fund  is  established,  withdraw  its  approval  and  dissolve 

3  the  fund:   if  rendered  necessary  by  the  consolidation  or  division  of  a 

4  district;  if  the  number  of  insured  members  is  so  small  as  to  endanger 

5  the  solvency  of  the  fund;    upon  the  petition  of  a  majority  of  the 

6  board  of  directors  or  of  the  committee. 

7  The  assets  and  property  of  a  dissolved  fund,  after  provision  for 

8  benefits  and  for  the  pajanent  of  its  obligations,  shall  be  divided  among 

9  the  funds  and  societies  which  its  former  insured  members  join,  in 
10  such  proportions  as  the  commission  may  determine. 

• 

Continuation  of  Existence  of  Dissolved  Fund. 

1  SECTION  8.    A  dissolved  fund  shall,  nevertheless,  continue  in  exist- 

2  ence  for  the  purpose  of  paying  any  existing  obligations,  disposing  of, 

3  collecting  and  distributing  its  assets,  and  doing  all  other  acts  required 

4  in  order  to  adjust  and  wind  up  its  business  affairs,  and  may  sue  and 

5  be  sued  for  any  of  the  purposes  of  this  section . 


1917.1  HOUSE  —  No.  1850.  161 


Powers  of  Funds. 

1  SECTION  9.     Funds  shall  be  corporations  and  shall  have  all  the 

2  power  necessary  to  carry  out  their  duties  under  this  act,  including 

3  the  power  to  verify  by  audit  pay  rolls  of  employer  members  for  the 

4  purpose  of  determining  contributions  for  which  employer  members 

5  are  liable. 

Constitution  of  Fund. 

1  SECTION  10.     Subject  to  the  provisions  of  this  act,  the  constitution 

2  of  a  fund  shall  contain :  name  of  the  fund  and  location  of  its  principal 

3  office;   if  the  fund  is  a  trade  fund,  designation  of  the  trade  or  trades 

4  for  which  it  is  created;  maximum  percentages  of  earnings  as  provided 

5  in  sections  thirty  and  thirty-one  of  Part  IV  of  this  act,  at  which  the 

6  regular  contribution  of  employer  and  employee  may  be  fixed;   which 

7  maximum,  inclusive  of  the  contribution  of  the  commonwealth,  shall 

8  not  exceed  four  per  cent  of  such  total,  except  with  the  approval  of  the 

9  commission,  and  shall  in  no  case  exceed  six  per  cent  of  such  total; 

10  nature  and  amount  of  benefits  and  length  of  time  during  which  they 

11  shall  be  given;   manner  of  election,  number,  power,  duties  and  time 

12  of  meeting  of  all  committees;    number,  powers,  duties  and  time  of 

13  meeting  of  the  board  of  directors;   method  of  amendment  of  consti- 

14  tution,  and  such  other  provisions  as  may  be  directed  by  the  com- 

15  mission. 

Committee  of  the  Fund. 

1  SECTION  11.     There  shall  be  a  committee  of  each  fund  which  shall 

2  consist  of  not  less  than  twent}^  and  not  more  than  one  hundred  mem- 

3  bers,  to  be  elected  in  the  manner  provided  in  the  constitution,  one  half 

4  by  the  employer  members  of  the  fund,  one  half  by  the  employee 

5  members.    The  committee  shall  cause  an  audit  of  the  accounts  of 

6  the  fund  to  be  made  each  year  and  shall  pass  upon  the  same  and  upon 

7  the  annual  report  and  budget  of  the  board  of  directors. 

Employers'  Votes. 

1  SECTION  12.     Each  employer  member  shall  have  as  many  votes 

2  for  employer  members  of  the  committee  as  he  employs  workmen 

3  subject  to  the  insurance  who  are  members  of  the  fund,  except  that 

4  no  one  employer  shall  have  more  than  forty  per  cent  of  the  total 

5  votes  unless  otherwise  provided  in  the  constitution. 

Board  of  Directors. 

1  SECTION  13.    The  board  of  directors  shall  consist  of  an  even  nuin- 

2  ber  of  directors,  not  less  than  eight  and  not  more  than  eighteen,  one 

3  half  of  whom  shall  be  elected  by  employer  members  of  the  committee 

4  and  one  half  by  employee  members  of  the  committee,  and  in  addition, 


162  SOCIAL  INSURANCE.  [Feb. 

5  one  director  who  shall  be  chosen  for  a  term  of  three  years  by  a  ma- 

6  jority  vote  of  the  directors  so  elected.     No  one  shall  be  a  member  of 

7  the  committee  and  a  director  at  the  same  time  and  all  directors  must 

8  be  citizens  of  the  United  States  and  a  majority  of  both  employers  and 

9  employee  directors  must  be  residents  of  the  commonwealth.    The 

10  directors  elected  by  the  members  of  the  committee  shall  be  elected 

11  for  three  years  but  the  directors  first  elected  shall  by  lot  be  divided 

12  into  classes  so  that  as  nearly  as  possible  an  equal  number  shall  go 

13  out  of  office  each  year.    The  compensation  of  the  members  of  the 

14  board  shall  be  not  more  than  five  dollars  a  day  for  each  day  of  atten- 

15  dance  upon  the  meetings  of  the  board.     No  director  shall  hold  any 

16  other  office  under  this  act. 

Removal  of  Directors. 

1  SECTION  14.    If  a  board  of  directors  violate  or  fail  to  comply  with 

2  this  act,  the  commission  may,  after  a  public  hearing,  remove  the 

3  directors,  appoint  temporary  directors,  and  call  a  meeting  of  the 

4  committee  to  elect  directors  to  fill  the  unexpired  terms  of  the  directors 
'5  removed.    The  directors  appointed  by  the  commission  shall  serve 
6  until  the  directors  thereafter  elected  by  the  committee  qualify. 

Appointment  of  Directors  by  Commission. 

1  SECTION  15.    If  at  any  time  the  number  of  directors  be  not  suffi- 

2  cient  to  carry  on  the  affairs  of  the  fund,  and  if  after  notice  from  the 

3  commission,  the  committee  fail  to  elect  directors,  the  commission 

4  may  appoint  directors  who  shall  serve  until  those  thereafter  elected 

5  by  the  committee  qualify. 

Powers  of  the  Board. 

1  SECTION  16.    The  board  shall  fill  vacancies  in  its  own  number  for 

2  unexpired  terms,  provided  that  only  employers'  representatives  shall 

3  vote  for  employer  directors,  and  only  employees'  representatives  for 

4  employee  directors;    appoint  all  officers  and  employees  of  the  fund 

5  and  fix  their  salaries;  elect  a  president  and  secretary  from  their  own 

6  number;  make  regulations  necessary  for  carrying  out  the  purposes  of 

7  the  fund;   make  contracts  with  physicians,  nurses,  hospitals,  dispen- 

8  saries,  pharmacists,  institutions  and  associations,  and  any  other  per- 

9  sons  necessary  for  the  business  of  the  fund;   prepare  and  submit  to 

10  the  committee  annually  a  financial  account  and  a  report  for  the  past 

11  year  and  a  budget  for  the  ensuing  year;  represent  the  fund  and  direct 

12  and  administer  its  affairs,  except  as  otherwise  specified  in  this  act. 

Officers'  Bonds. 

1  SECTION  17.    All  officers  of  a  fund  who  are  intrusted  with  its  moneys 

2  shall  be  bonded  for  amounts  to  be  determined  by  the  board  of  directors 

3  with  the  approval  of  the  commission. 


1917.]  HOUSE  —  No.  1850. 


Reserve. 

1  SECTION  18.     Every  fund  shall  accumulate  a  reserve.     The  board 

2  of  directors  shall  transfer  to  such  reserve  one  twentieth  of  the  annual 

3  income  of  the  fund  until  such  reserve  is  equal  to  one  sixth  of  the  total 

4  expenditure  for  the  preceding  three  years. 

Membership  in  Fund. 

1  SECTION  19.    Every  person  subject  to  insurance  shall,  by  virtue  of 

2  this  act  and  without  regard  to  his  physical  condition,  be  an  insured 

3  member  of  the  trade  fund  of  the  trade  at  which  and  in  the  district 

4  in  which  he  is  employed,  or,  if  there  be  no  such  fund,  of  such  local 

5  fund  of  the  district,  as  provided  by  the  regulations  of  the  commission: 

6  provided,  that  while  he  is  a  member  of  an  approved  society  he  shall  be 

7  excluded  by  the  board  of  directors  from  membership  in  a  fund.    The 

8  commission  shall  provide  by  regulation  for  the  cases  of  persons  regu- 

9  larly  occupied  at  one  trade  but  temporarily  employed  at  another. 

10  Membership  in  a  local  or  trade  fund  shall  cease  as  soon  as  the  insured 

11  person  becomes  a  member  of  another  local  or  trade  fund.    Every 

12  employer  shall,  by  virtue  of  this  act,  be  an  employer  member  of  all 

13  funds  of  which  any  of  his  employees  are  members. 

Membership  in  Societies. 

1  SECTION  20.    A  person  subject  to  insurance  shall  become  a  mem- 

2  ber:  — 

3  Of  an  establishment  society  on  the  day  of  entering  employment  in 

4  the  establishment,  and  shall,  except  as  otherwise  provided  by  law  or 

5  in  the  constitution  or  by-laws,  cease  to  be  such  member  on  quitting 

6  employment  in  the  establishment; 

7  Of  a  labor  union  or  a  benevolent  or  fraternal  society  on  being  ac- 

8  cepted  by  it,  and  shall  cease  to  be  such  member  on  his  resignation  or 

9  expulsion,  except  as  otherwise  provided  by  law  or  in  the  constitution 
10  or  by-laws. 

Membership  during  Disability. 

1  SECTION  21.     Insured  membership  shall  continue  during  receipt  of 

2  sickness  or  cash  maternity  benefits  or  hospital  treatment  or  during 

3  discontinuance  of  sickness  benefit  because  of  refusal  to  accept  hospital 

4  treatment,  except  that  no  such  insured  member  shall  have  a  vote  or 

5  be  included  in  the  number  of  insured  members  on  which  the  vote  of 

6  any  employer  member  is  based. 

Residents  without  the  District. 

1  SECTION  22.     If  an  insured  person  reside  in  the  commonwealth,  but 

2  temporarily  or  permanently  outside  of  the  district  of  the  fund  of 

3  which  he  is  a  member,  the  trade  fund  of  the  same  trade,  or  if  there 


164  SOCIAL  INSURANCE.  [Feb. 

4  be  none,  the  local  fund  in  the  district  in  which  he  resides,  shall  supply 

5  the  minimum  benefits  provided  in  this  act  and  shall  be  reimbursed  by 

6  the  fund  of  which  the  insured  person  is  a  member.     Other  benefits 

7  shall  be  paid  in  cash  if  not  provided  for  by  agreements  between  funds 

8  or  otherwise.    The  commission  shall  provide  by  regulation  for  insured 

9  persons  residing  permanently  or  temporarily  without  the  common- 
10  wealth. 

Determination  of  District  of  Employment. 

1  SECTION  23.    The  district  in  which  the  establishment  in  which  an 

2  insured  person  is  employed,  or  if  he  be  not  employed  in  an  establish- 

3  ment,  the  district  in  which  the  principal  place  of  business  of  the 

4  employer  is  located,  shall  be,  for  the  purpose  of  this  act,  the  district 

5  of  employment,  but  the  commission  may,  for  the  convenience  of 

6  administration  either  permanently  or  temporarily  establish  as  such 

7  district  that  in  which  the  insured  member  is  actually  employed  or  in 

8  which  his  wages  are  paid. 


Voluntary  Insurance. 

1  SECTION  24.    A  person  entitled  to  voluntary  insurance  must  be 

2  admitted  on  application  to  membership  in  the  trade  fund  of  his  trade 

3  in  the  district  in  which  he  is  employed,  or  if  there  be  no  such  fund, 

4  then  in  such  local  fund  of  the  district  as  is  provided  by  the  regulations 

5  of  the  commission:   provided,  that  except  for  persons  who  have  been 

6  compulsorily  insured  persons  within  one  month  the  by-laws  of  any 

7  fund  may  prohibit  the  admission  to  voluntary  insurance  of  a  person 

8  who  has  not  passed  a  satisfactory  medical  examination  by  its  medical 

9  officers. 

10  The  contribution  and  benefits  shall:    (1)  be  based  upon  such  an 

11  amount  of  earnings,  in  the  case  of  a  person  formerly  compulsorily 

12  insured,  not  exceeding  the  earnings  upon  which  his  contributions  and 

13  benefits  were  based  immediately  preceding  the  date  upon  which  he 

14  ceased  to  be  so  insured,  and  in  the  case  of  other  voluntary  members 

15  upon  not  more  than  actual  earnings,  nor  more  than  one  hundred 

16  dollars  per  month,  as  the  member  may  elect;  (2)  be  the  same  as  for  a 

17  compulsory  member  of  the  same  trade.    The  full  contribution  in  the 

18  case  of  a  voluntary  member  shall  be  borne  by  the  member  and  the 

19  state  in  the  following  proportion:    the  member,  four  fifths,  and  the 

20  state,  one  fifth. 

Loss  of  Voluntary  Membership. 

1  SECTION  25.    A  person  voluntarily  insured  shall  lose  his  rnember- 

2  ship  if  he  acquire  membership,  either  voluntary  or  compulsory,  in 

3  another  fund  or  society,  or  if  he  be  in  arrears  for  one  month  in  the 


Ml 


HOUSE  — No.  1850.  165 


4  payment  of  his  contributions,  unless  this  period  be  extended  by  the 

5  fund  or  society. 

Fines  and  Penalties. 

1  SECTION  26.    Funds   or  societies  may  fine   their  employer  and 

2  insured  members  and  suspend  insured  members  from  benefit  for  viola- 

3  tion  of  their  rules  or  regulations  or  for  fraudulent  representations  made 

4  with  the  intent  of  securing  or  aiding  another  to  secure  benefits,  in 

5  accordance  with  rules  approved  by  the  commission  providing  for  and 

6  limiting  such  fines  or  suspension,  but  contributions  will  in  every  case 

7  be  required  in  respect  to  each  suspended  member.    If  an  employer 

8  fail  or  refuse  to  pay  any  contribution  due  to  funds  under  this  act,  the 

9  funds  to  which  the  contribution  is  due  may  recover  from  such  employer, 

10  the  whole  amount  of  such  contribution  due  from  such  employer  and 

11  his  employees  with  interest  at  six  per  cent  by  suit  in  a  court  of  com- 

12  petent  jurisdiction,  and  the  employer  shall  not  be  entitled  to  deduct 

13  any  part  of  such  sum  from  the  earnings  of  his  employee  or  employees. 


Approved  Societies. 

1  SECTION  27.    A  labor  union,  a  benevolent  or  fraternal  society  or  an 

2  establishment  societj^  shall  be  approved  by  the  commission  only  after 

3  hearing  the  local  or  trade  funds  affected  and  only  if  it  is  not  carried 

4  on  for  profit,  but  reasonable  salaries  paid  officials  shall  not  be  con- 

5  sidered  profit;  it  is  under  the  absolute  control  of  the  insured  members 

6  in  so  far  as  the  insurance  regulated  by  this  law  is  affected,  except  that 

7  the  employer  may  appoint  one  half  of  the  governing  body  of  an  estab- 

8  lishment  society;  it  shall  satisfy  the  commission  that  it  is  in  a  sound 

9  financial  condition;  it  grants  at  least  the  minimum  benefits  provided 

10  in  this  act;    it  has  a  membership  of  at  least  five  hundred  persons 

11  insured  for  at  least  the  minimum  benefits  provided  under  this  act  or 

12  then*  equivalent,  except  that  in  the  case  of  establishment  societies 

13  in  which  the  employer  satisfactorily  guarantees  the  payment  of  bene- 

14  fits,  the  minimum  number  of  members  may  be  determined  by  the 

15  commission;  its  operation  will  not,  in  the  opinion  of  the  commission, 

16  endanger  the  existence  of  any  local  or  trade  fund:  in  case  of  an  estab- 

17  lishment  society,  a  majority  of  the  employees  subject  to  insurance 

18  request  approval,  and  the  employer's  contribution  be  at  least  equal  to 

19  that  of  all  the  employees. 

20  The  approval  of  the  commission  may  be  withdrawn  at  any  time 
.  21  upon  its  finding,  after  hearing  the  society  affected,  that  any  of  the 

22  required  conditions  are  no  longer  satisfied.    The  commission  may, 

23  after  a  hearing,  permit  an  establishment  society  to  accept  as  members, 

24  on  conditions  satisfactory  to  the  commission,  all  persons  subject  to 

25  insurance  in  its  district. 


166  SOCIAL  INSURANCE.  [Feb. 


Employers'  Contributions. 

1  SECTION  28.    The  commission  shall  assess  upon  every  employer, 

2  any  of  whose  employees  are  insured  in  an  approved  society  other  than 

3  an  establishment  society,  a  sum  equivalent  to  the  employer's  con- 

4  tributions  had  such  employees  been  members  of  funds.    This  sum 

5  shall  be  paid  in  monthly  installments  into  the  guarantee  fund  estab- 

6  lished  by  the  commission. 


Contributions  of  the  Commonwealth. 

1  SECTION  29.    The  commonwealth  shall  contribute  to  every  approved 

2  society,  one  fifth  of  its  total  expense  for  health  insurance  under  this  act, 

3  subject  to  the  provisions  of  section  nine  of  Part  V  of  this  act. 

Wage  Groups. 

1  SECTION  30.    A  fund  or  society  may,  with  the  approval  of  the  com- 

2  mission,  divide  its  members  into  wage  classes,  and  fix  the  rates  of 

3  sickness  and  maternity  benefits  and  the  rate  of  contributions  in  each 

4  class. 

Basis  of  Contribution  and  Benefits. 

1  SECTION  31.    A  fund  or  society  may,  for  the  purpose  of  calculating 

2  benefits  and  contributions  under  this  act,  estimate  the  average  earn- 

3  ings  in  any  employment  or  grade  or  branch  thereof,  and  on  the  approval 

4  of  the  commission  the  average  so  determined  shall  form  the  basis  for 

5  the  calculation  of  such  benefits  and  contributions. 

Property  of  the  Fund  Tax  Free. 

1  SECTION  32.    The  property  of  a  fund,  and  such  part  of  the  property 

2  of  any  approved  society  as  is  used  for  the  purposes  of  this  act,  shall  be 

3  exempt  from  all  commonwealth,  municipal  or  local  taxes. 

Contributions  a  Preferred  Claim. 

1  SECTION  33.    Contributions  due  and  unpaid  shall  have  the  same 

2  preference  or  lien,  without  limit  of  amount,  against  the  assets  of  the 

3  employer  as  is  now  or  hereafter  may  be  allowed  by  law  for  a  claim  for 

4  unpaid  wages  for  labor. 

Health  Insurance  Union. 

1  SECTION  34.    Two  or  more  funds  or  societies  may  combine  for  the 

2  administration  of  the  medical  benefit,  subject  to  the  approval  of  the 

3  commission.    The  commission  may,  after  notice  to  and  hearing  of  the 


1917.]  HOUSE  —  No.  1850.  167 

4  parties  in  interest,  withdraw  its  approval  and  dissolve  the  union, 

5  making  such  disposition  of  its  property  as  may  seem  to  it  in  the  best 

6  interests  of  the  insured. 

PART  V. 

COMMISSION. 

Health  Insurance  Commission. 

1  SECTION  1.    The  health  insurance  commission  is  hereby  created, 

2  consisting  of  five  commissioners,  to  be  appointed  by  the  governor, 

3  one  of  whom  shall  be  designated  by  the  governor  as  chairman.    Of 

4  the  five  members,  one  shall  be  a  wage  earner,  one  an  employer,  and  one 

5  a  physician.    The  term  of  office  of  members  of  the  commission  shall 

6  be  five  years,  except  that  the  first  members  thereof  shall  be  appointed 

7  for  such  terms  that  the  term  of  one  member  shall  expire  on  January 

8  first,  nineteen  hundred  and  nineteen,  and  one  on  January  first  of  each 

9  of  the  four  succeeding  years.     Each  commissioner  shall  devote  his 

10  entire  time  to  the  duties  of  his  office,  and  shall  not  hold  any  position  of 

11  trust  or  profit,  or  engage  in  any  occupation  or  business  interfering  with 

12  or  inconsistent  with  his  duties  as  commissioner,  or  serve  on  or  under 

13  any  committee  of  a  political  party.    The  commission  shall  have  an 

14  official  seal  which  shall  be  judicially  noticed. 

Secretary. 

1  SECTION  2.    The  commission  shall  appoint  and  m&y  remove  a  sec- 

2  retary,  at  an  annual  salary  of  three  thousand  six  hundred  dollars.    The 

3  secretary  shall  perform  such  duties  in  connection  with  the  meetings 

4  of  the  commission,  and  its  investigations,  hearings,  and  the  preparation 

5  of  rules  and  regulations  under  the  provisions  of  this  act,  as  the  com- 

6  mission  may  prescribe. 

Officers  and  Employees. 

1  SECTION  3.    The  commission  may  appoint  such  officers,  other  as- 

2  sistants  and  employees  as  may  be  necessary  for  the  exercise  of  its  power 

3  and  the  performance  of  its  duties  under  the  provisions  of  this  act,  all 

4  of  whom  shall  be  in  the  competitive  class  of  the  classified  civil  service; 

5  and  the  commission  shall  prescribe  their  duties  and  fix  their  salaries, 

6  which  shall  not  exceed  in  the  aggregate  the  amount  annually  appro- 

7  priated  by  the  legislature  for  that  purpose. 

Salaries  and  Expenses. 

1  SECTION  4.     The  chairman  of  the  commission  shall  receive  an  annual 

2  salary  of  four  thousand  five  hundred  dollars,  and  each  other  cominis- 

3  sioner  an  annual  salarv  of  four  thousand  dollars.    The  commissioners 


168  SOCIAL  INSURANCE.  [Feb. 

4  and  their  subordinates  shall  be  entitled  to  their  actual  and  necessary 

5  expenses  while  traveling  on  the  business  of  the  commission.     The 

6  salaries  and  compensation  of  the  subordinates  and  all  other  expenses 

7  of  the  commission  shall  be  paid  out  of  the  treasury  of  the  common- 

8  wealth  upon  vouchers  signed  by  the  chairman  or  one  of  the  commis- 

9  sioners  designated  by  him  for  that  purpose. 

Offices. 

1  SECTION  5.    The  commission  shall  have  its  main  office  in  the  city 

2  of  Boston  and  may  establish  and  maintain  branch  offices  in  other  cities 

3  of  the  commonwealth  as  it  may  deem  advisable.    Branch  offices  shall, 

4  subject  to  the  supervision  and  direction  of  the  commission,  be  in  im- 

5  mediate  charge  of  such  officials  or  employees  as  it  shall  designate. 

Powers  of  Individual  Commissioners. 

1  SECTION  6.    Any  investigation,  inquiry  or  hearing  which  the  com- 

2  mission  is  authorized  to  hold  or  undertake  may  be  held  or  undertaken 

3  by  or  before  any  commissioner,  and  the  award,  decision  or  order  of 

4  a  commissioner,  when  approved  and  confirmed  by  the  commission 

5  and  ordered  filed  in  its  office,  shall  be  deemed  to  be  the  award,  de- 

6  cision  or  order  of  the  commission.    Each  commissioner  shall,  for  the 

7  purpose  of  this  act,  have  power  to  administer  oaths,  certify  to  official 

8  acts,  take  depositions,  issue  subpoenas,  and  compel  the  attendance 

9  of  witnesses  and  the  production  of  books,  accounts,  papers,  records, 
10  documents  and  testimony. 


Powers  of  Commission. 

1  SECTION  7.    The  commission  may  adopt  all  reasonable  rules  and 

2  regulations  and  do  all  things  necessary  to  put  into  effect  the  provisions 

3  of  this  act.     The  commission  shall,  upon  presentation  of  evidence, 

4  which  shall  have  previously  been  presented  to  the  medical  advisory 

5  board,  that  any  physician,  surgeon,  dentist  or  nurse,  practising  under 

6  the  act,  is  incompetent,  neglectful  of  his  duty  or  dishonest,  be  em- 

7  powered  to  suspend  or  debar  such  physician,  surgeon,  dentist  or  nurse 

8  from  practice  under  the  act,  and  the  decision  of  the  commission  shall 

9  be  final. 

Payment  of  Commonwealth  Contributions. 

1  SECTION  8.    The  commission  shall  estimate  the  contribution  of  the 

2  commonwealth  annually  before  the  first  day  of  January  of  each  year 

3  and  shall,  before  that  date,  apportion  it  among  the  funds  and  societies, 

4  in  proportion  to  their  estimated  expenditures  for  the  purposes  of  this 

5  act  during  the  year,  and  shall  notify  the  treasurer  of  the  commonwealth 

6  of  the  sum  to  be  paid  on  March  thirty-first,  June  thirtieth,  September 


1917.]  HOUSE  —  No.  1850.   '  169 

7  thirtieth,  and  December  thirty-first  of  the  current  year  to  each  fund 

8  and  society.    The  treasurer  shall  pay  the  amount  out  of  the  unex- 

9  pended  balance  of  any  appropriation  in  his  hands  for  the  purpose. 

Guarantee  Fund. 

1  SECTION  9.    The  commission  shall  reserve  ten  per  cent  of  the  con- 

2  tributions  of  the  commonwealth  to  the  funds  and  societies  and  pay  it 

3  into  a  fund  to  be  known  as  the  guarantee  fund,  from  which  it  may 

4  contribute  for  the  relief  of  any  fund  or  society  on  the  application  of 

5  its  board  of  directors  after  investigation  by  the  commission.    A  con- 

6  tribution  shall  be  made  only  where,  in  the  judgment  of  the  com- 

7  mission,  the  necessity  arises  from  epidemic,  catastrophe  or  other  un- 

8  usual  conditions,  and  shall  never  be  made  where,  in  the  opinion  of 

9  the  commission,  the  deficit  is  due  to  failure  or  refusal  of  the  directors 

10  to  levy  proper  rates  of  contributions.    When  and  so  long  as  in  the 

11  opinion  of  the  commission  the  guarantee  fund  is  sufficient,  the  com- 

12  mission  shall  make  no  reservation  for  this  purpose. 


Treasurer  of  the  Commonwealth,  Custodian  of  the  Fund. 

1  SECTION  10.    The  treasurer  of  the  commonwealth  shall  be  the  cus- 

2  todian  of  the  guarantee  fund,  and  all  disbursements  therefrom  shall 

3  be  paid  by  him  upon  vouchers  authorized  by  the  commission  and 

4  signed  by  the  chairman  or  another  member  designated  by  him  in 

5  writing.    The  treasurer  of  the  commonwealth  shall  give  a  separate 

6  and  additional  bond  in  an  amount  to  be  fixed  by  the  governor  and 

7  with  securities  approved  by  the  auditor  of  the  commonwealth  con- 

8  ditioned  for  the  faithful  performance  of  his  duty  as  custodian  of  the 

9  guarantee  fund.     The  treasurer  of  the  commonwealth  may  deposit 

10  any  portion  of  the  fund  not  needed  for  immediate  use  in  the  manner 

11  and  subject  to  all  the  provisions  of  law  respecting  the  deposit  of  other 

12  commonwealth  funds  by  him.    Interest  earned  by  such  portion  of  the 

13  guarantee  fund  deposited  by  the  treasurer  of  the  commonwealth  shall 

14  be  collected  by  him  and  placed  to  the  credit  of  the  fund. 

Report  of  Commission. 

1  SECTION  11.    Annually,  on  or  before  the  first  day  of  February, 

2  the  commission  shall  make  a  report  to  the  governor,  which  he  shall 

3  lay  before  the  legislature,  which  shall  include  a  statement  of  the  ap- 

4  portionment  of  the  contribution  of  the  commonwealth,  statistics  of 

5  sickness  experience  under  this  act,  a  detailed  statement  of  the  ex- 

6  penses  of  the  commission,  the  condition  of  the  guarantee  fund,  together 

7  with  any  other  matters  which  the  commission  deems  proper  to  report, 

8  including  any  recommendations  it  may  desire  to  make. 


170  SOCIAL  INSURANCE.  [Feb. 


Health  Insurance  Council. 

1  SECTION  12.    The  health  insurance  council  shall  consist  of  twelve 

2  members,  six  of  whom  shall  be  elected  by  employer  directors  and  six 

3  by  employee  directors  of  the  local  and  trade  funds;  their  term  of  office 

4  shall  be  two  years,  except  that  in  the  first  election  three  of  the  em- 

5  ployer  and  three  of  the  employee  members  of  the  council  shall  be 

6  elected  for  one  year;  they  shall  receive  a  compensation  of  five  dollars 

7  a  day  for  each  day  spent  on  the  business  of  the  council,  and  shall  be 

8  reimbursed  for  reasonable  expenses  incurred  in  connection  with  such 

9  business,  to  be  paid  as  other  expenses  of  the  commission  are  paid. 

Officers  of  Council. 

1  SECTION  13.    The  council  shall  elect  a  president  from  its  own  num- 

2  ber;  the  secretaty  of  the  commission  shall  act  as  secretary  of  the  council. 


Meetings  of  Council. 

1  SECTION  14.    The  council  shall  meet  during  the  first  week  of  January, 

2  of  April,  of  July,  of  September,  each  year.    Special  meetings  shall  be 

3  called  by  the  president  on  the  request  of  at  least  five  members  of  the 

4  council  or  of  two  members  of  the  commission,  at  any  time. 


Duties  of  Council. 

1  SECTION  15.    The  annual  report  and  recommendations  of  the  com- 

2  mission  shall  be  laid  before  the  Januarj^  meeting  of  the  council  before 

3  transmission  to  the  governor,  and  the  council  may  approve  them  or 

4  make  a  separate  report  and  recommendations  to  the  governor.    All 

5  general  regulations  proposed  by  the  commission  shall  be  laid  before 

6  the  council  at  a  regular  or  special  meeting  for  discussion  before  final 

7  adoption,  except  in  cases  of  urgency,  to  be  determined  by  the  commis- 

8  sion,  and  in  this  case  the  regulation  shall  be  laid  before  the  next  regular 

9  meeting  of  the  council  or  a  special  meeting  called  for  the  purpose. 


Medical  Advisory  Board. 

1  SECTION  16.    There  shall  be  a  medical  advisory  board  of  eleven 

2  members.    The  commissioner  of  health  of  the  commonwealth  and  the 

3  secretary  of  the  state  board  of  registration  in  medicine  shall  be  ex 

4  officio  members  of  the  board,  seven  members  shall  be  chosen  by  the 

5  medical  society  of  the  state,  and  two  by  the  homeopathic  medical 

6  society  of  the  state.    The  term  of  office  of  chosen  members  shall  be 

7  three  years,  except  that  the  members  first  chosen  shall  choose  bv  lot 


1917.]  HOUSE  —  No.  1850.  171 

8  three  of  their  number  to  go  out  of  office  at  the  end  of  one  year  and 

9  three  at  the  end  of  two  years.    The  board  shall  elect  its  own  chairman 

10  and  other  officers.    Its  members  shall  be  paid  necessary  expenses,  but 

11  no  salaries. 


Powers  of  Medical  Advisory  Board. 

1  SECTION  17.    All  regulations  of  the  commission  relating  to  phy- 

2  sicians  and  to  medical  benefits  shall  be  referred  to  the  medical  advisory 

3  board  and  shall  not  be  approved  by  the  commission  until  after  the 

4  first  regular  meeting  of  the  board  after  such  reference,  unless  sooner 

5  acted  upon  by  the  board,  except  in  case  of  an  emergency,  when  the 

6  commission  may  issue  a  temporary  regulation  for  a  period  of  not  over 

7  six  months.    The  medical  advisory  board  shall  make  recommendations 

8  to  the  commission  on  standards  for  the  hospitals  and  dispensaries 

9  which  provide  service  under  the  act;  for  admission  to  practice  under 

10  the  act  as  specialists;  and  for  obstetrical  care.    Such  recommendations 

11  of  the  medical  advisory  board  shall  be  effective  on  approval  by  the 

12  commission. 

Meetings  of  the  Medical  Advisory  Board. 

1  SECTION  18.    The  board  shall  meet  at  least  once  every  three  months 

2  and  may  be  called  together  at  any  time  on  one  week's  notice  by  the 

3  chairman  or  by  a  call  signed  by  any  five  members  or  by  the  commis- 

4  sion.    A  majority  of  the  members  of  the  board  shall  constitute  a 

5  quorum. 

Settlement  of  Disputes. 

1  SECTION  19.    All  disputes  arising  under  the  act  shall  be  determined 

2  by  the  commission  either  on  appeal  or,  in  case  of  disputes  between 

3  funds  and  societies,  by  original  proceedings.     The  commission  may 

4  assign  any  dispute  except  disputes  in  regard  to  medical  benefit,  for 

5  hearing  and  determination  to  a  dispute  committee  composed  of  one 

6  employer  and  one  employee  member  of  the  council,  and  a  member  of 

7  the  commission,  as  chairman,  the  members  of  the  council  to  serve  in 

8  turn  on  the  dispute  committee  for  periods  of  one  month.    Either  party 

9  may  appeal  to  the  commission  from  the  decision  of  the  dispute  com- 
10  mittee  within  thirty  days  from  the  date  of  rendering  the  decision. 


Medical  Disputes. 

1  SECTION  20.    All  disputes  regarding  medical  benefit,  which  have 

2  been  appealed  to  the  commission,  shall  be  referred  by  the  commission 

3  to  the  medical  advisory  board,  which  shall  report  to  the  commission, 

4  and  the  commission  shall  not  decide  any  such  dispute  until  after  a 

5  report  has  been  made  by  the  board. 


172  SOCIAL  INSURANCE.  [Feb. 


Nurses'  Advisory  Board. 

1  SECTION  21.    The  state  nurses'  association  shall  choose. a  nurses' 

2  advisory  board  of  seven  members,  which  shall  be  advisory  to  the  com- 

3  mission  on  all  matters  relating  to  nursing  service. 

Suits  at  Law. 

1  SECTION  22.    Suits  shall  not  be  brought  in  any  court  on  any  matter 

2  on  which  an  appeal  is  allowed  to  the  commission  until  after  a  decision 

3  by  the  commission,  or  of  a  dispute  committee  and  the  statutes  of 

4  limitations  shall  not  begin  to  run  in  such  cases  until  after  the  decision 

5  is  filed. 

PART  VI. 

MISCELLANEOUS   PROVISIONS. 

Limitations  of  Claims. 

1  SECTION  1.    No  claim  for  benefit  shall  be  valid  unless  made  to  the 

2  board  of  directors  of  the  proper  fund  or  society  within  one  year  from 

3  the  tune  when  the  benefit  was  due. 

Disclosure  prohibited. 

1  SECTION  2.    Information  acquired  by  the  commission  or  a  fund,  or 

2  any  of  their  officers  or  employees,  from  employers  or  employees  pur- 

3  suant  to  this  act,  shall  not  be  opened  to  public  inspection,  and  any 

4  such  officer  or  employee  who,  without  authority  of  the  commission  or 

5  pursuant  to  its  rules,  or  as  otherwise  acquired  by  law,  shall  disclose 

6  the  same  shall  be  guilty  of  a  misdemeanor. 

Unauthorized  Deductions  from  Wages  prohibited. 

1  SECTION  3.    An  employer  shall  not  deduct  from  the  wages  or  salary 

2  of  an  employee  any  part  of  any  contribution  required  to  be  borne  by 

3  the  employer,  or  make  any  agreement  with  the  employee  for  the  re- 

4  payment  of  any  part  of  such  contribution.    Any  employer  who  violates 

5  this  section  is  guilty  of  a  misdemeanor  and  upon  conviction  shall  be 

6  plmished  by  a  fine  of  not  more  than  ten  dollars.    Every  deduction  or 

7  repayment  in  the  case  of  each  employee  shall  constitute  a  separate 

8  violation. 

Penalties. 

1  SECTION  4.    Any  person  who:    (1)  prevents  or  obstructs  the  audit 

2  of  a  pay  roll,  as  authorized  by  this  act;  (2)  knowingly  makes  any  false 

3  statement  or  false  representation  for  the  purpose  of  obtaining  any 

4  benefit  or  payment  under  this  act,  either  for  himself  or  any  other 


1917.]  HOUSE  —  No.  1850.  173 

5  person;  or  (3)  wilfully  violates  or  fails  to  comply  with  this  act  or  any 

6  regulation  or  order  made  by  the  commission,  is  guilty  of  a  misde- 

7  meanor. 

Technical  Rules  of  Evidence  or  Procedure  not  re  quired. 

1  SECTION  5.    The  commission  or  a  deputy  commissioner  or  dispute 

2  committee,  in  making  an  investigation  or  inquiry  or  conducting  a 

3  hearing,  shall  not  be  bound  by  common  law  or  statutory  rules  of  evi- 

4  dence  or  by  technical  or  formal  rules  of  procedure,  except  as  provided 

5  by  this  act,  but  may  make  such  investigation  or  inquiry  or  conduct 

6  such  hearing  in  such  manner  as  to  ascertain  the  substantial  rights  of 

7  the  parties. 

When  to  take  Effect. 

1  SECTION  6.    This  act  shall  take  effect  immediately,  except  that  the 

2  provisions  as  to  the  payment  of  contributions  shall  not  take  effect  until 

3  April  first,  nineteen  hundred  and  eighteen,  and  the  first  payment  of 

4  contributions  by  the  commonwealth  shall  not  be  made  until  June 

5  thirtieth,  nineteen  hundred  and  eighteen;  the  provisions  as  to  the 

6  benefits  shall  not  take  effect  until  July  thirty-first,  nineteen  hundred 

7  and  eighteen:  provided,  that  if  a  fund  or  society  is  authorized  after 

8  January  first,  nineteen  hundred  and  eighteen,  the  provisions  as  to  the 

9  benefits  shall  not  take  effect  until  three  months  after  authorization. 


174  SOCIAL  INSURANCE.  [Feb. 


REPORT  ON  HEALTH  INSURANCE  PROVISIONS  AMONG 
LABOR  UNIONS  AND  FRATERNAL  ORGANIZATIONS  IN 
MASSACHUSETTS.1 

I.    NUMBER  OF  LABORERS  WITH  SICKNESS  INSURANCE. 

Of  the  1,425  labor  unions,  comprising  all  the  locals  in  the  State,  399  sent 
in  replies.  Of  these,  32.3  per  cent.  (129)  pay  some  sort  of  sick  benefit. 
Similar  figures  for  1908  show  that  28.5  per  cent,  of  the  unions  which  re- 
plied paid  a  sick  benefit.2  This  shows  an  increase  in  eight  years  of  102 
unions  paying  a  benefit  (if  the  figures  of  those  replying  to  the  inquiry  are 
assumed  to  be  representative  of  all  the  unions),  while  the  total  number  of 
local  unions  was  only  increased  by  169. 

It  is  estimated  that  80,0833  workmen  are  thus  insured  through  labor 
unions,  this  being  5.3  per  cent,  of  the  number  of  persons  eighteen  years  or 
over  gainfully  employed  in  Massachusetts,  receiving  annually  less  than 
$1,200.4  Possibly  this  percentage  is  not  accurate  because  of  the  fact  that, 
in  general,  the  larger  unions  are  more  likely  to  be  the  ones  which  have  a 
system  of  health  insurance. 

The  amount  of  sickness  benefit  paid  is  quite  variable,  ranging  from  $7 
per  week  paid  for  sixteen  weeks  in  any  twelve  months  to  $3  per  week 
for  six  weeks.  The  average  benefit  paid  is  $4.30  for  14.5  weeks.6  This 
is  much  less  than  that  proposed  in  the  standard  bill,  which  would  be  ap- 
proximately $7.23  a  week  6  for  twenty-six  weeks.  In  a  good  many  trades 
the  sick  benefit  is  paid  by  the  international  union  through  the  locals. 
This  results  in  a  uniformity  of  benefit  for  a  given  trade.  Some  of  the 
trades  which  seem  to  have  the  most  developed  system  of  benefits  are 
bakers,  barbers,  boot  and  shoe  workers  and  plumbers.  Other  trades  ap- 
parently have  no  locals  giving  benefits.  Among  these  are  brewery  workers, 
musicians,  painters  and  decorators,  textile  workers  and  theatrical  em- 
ployees. There  does  not  seem  to  be  any  relation  between  the  average 
wage  for  a  trade  and  the  payment  of  benefits.  Plumbers  are  highly  paid 
while  barbers  have  a  relatively  low  wage  scale. 

To  the  questions  sent  to  the  314  fraternal  organizations  113  replies 
were  received.  Of  these  113  societies,  64.6  per  cent.  (73)  paid  a  sickness 
benefit.  The  amount  paid  and  the  period  of  payment  seemed  to  be  very 
similar  to  that  of  labor  unions.  It  is  impossible  to  estimate  the  number 

1  Based  on  replies  to  a  questionnaire  sent  out  to  1,425  labor  unions  and  314  fraternal  organiza- 
tions by  the  Special  Commission  on  Social  Insurance. 

-  This  was  a  reply  from  937  out  of  1,256  local  unions  to  which  the  Bureau  of  Statistics  sent  in- 
quiries. 

3  Thirty-three  per  cent,  of  242,677,— an  estimate  of  the  membership  of  labor  unions  in  1916 
based  on  the  figures  for  1913  and  1914. 

4  This  was  estimated  at  1,507,373  by  the  Bureau  of  Statistics. 

3  These  averages  are  computed  with  such  unions  as  units.  To  be  correct  they  should  be 
computed  on  the  basis  of  membership  (i.e.,  giving  more  weight  to  the  larger  unions). 

•  Estimated  on  the  basis  of  $564  average  yearly  wage  of  union  members  (Bureau  of  Statistics), 
i.e.,  $10.85  per  week,  and  a  benefit  of  66^  per  cent,  of  wages. 


1917.]  HOUSE  —  No.  1850.  175 

of  laborers  who  receive  a  sickness  benefit  in  this  way.  It  is  a  larger  pro- 
portion of  the  organizations  of  this  character  than  of  the  labor  unions, 
but  probably  not  a  larger  proportion  of  the  total  number  of  laborers  in 
the  State. 

From  a  very  hasty  perusal  of  the  answers  to  questions  sent  to  the  manu- 
facturers in  representative  cities,  it  seemed  quite  evident  that  very  few 
of  them  provided  any  sort  of  insurance  for  their  employees,  and  that 
where  they  did,  generally  less  than  half  took  advantage  of  it. 

There  are  several  conclusions  which  may  be  drawn  from  this  investi- 
gation of  the  number  of  laborers  at  present  coming  under  some  health 
insurance  system.  In  the  first  place,  the  systems  in  use  are  far  from  uni- 
form, and  cover  only  a  small  proportion  of  the  laboring  population.  Sec- 
ondly, the  systems  are  prone  to  overlap  one  another.  Also  the  particular 
disadvantage  of  the  payment  of  sick  benefits  by  labor  unions  to  their 
members  lies  in  the  fact  that  if  a  man  ceases  to  be  a  member,  through 
removal  or  expulsion  or  any  other  cause,  he  loses  the  benefit  of  his  past 
contributions,  even  though  he  may  have  been  a  member  for  a  considerable 
time  and  paid  the  dues,  which  are  necessarily  high  in  a  union  which  pays 
benefits  to  its  sick  members. 


II.     NUMBER  OF  LABORERS  WITH  DEATH  BENEFIT. 

The  payment  of  a  death  benefit  was  found  to  be  much  more  prevalent, 
there  being  almost  twice  as  many  unions  paying  this  as  there  were  paying 
a  sickness  benefit.  Of  the  399  unions  replying,  61.9  per  cent.  (247)  pay 
a  death  benefit.  This  amount  varies  in  different  trades  and  between 
different  unions  in  the  same  trade.  It  is  generally  also  variable  according 
to  the  length  of  time  a  man  has  been  a  member  of  the  union.  Usually 
this  reaches  a  maximum  after  five  years  of  membership.  For  the  247 
unions  this  maximum  averaged  $284.80. 

III.    ECONOMIC  COST  OF  SICKNESS  IN  MASSACHUSETTS. 

Of  the  129  unions  reporting  a  sick  benefit,  95  gave  answers  to  the  ques- 
tions with  reference  to  the  amount  of  sickness  for  which  benefits  were 
paid  during  the  past  year.  From  these  answers  it  was  found  that  there 
was  an  average  per  annum  of  13.3  cases  of  sickness  per  100  persons 
insured,  with  an  average  loss  of  23.6  days  per  case,  or  3.1  days  per  per- 
son annually  insured.  Considering  sickness  to  be  equally  prevalent 
among  other  laborers,  this  would  give  a  total  of  4,672,856.3  days  lost 
by  the  employed  workers  in  the  State.  Considering  the  average  wage 
of  these  workers  as  $564,  the  total  loss  in  wages  by  their  sickness  would 
be  $7,209,549.72  per  year.  To  complete  the  estimate  of  the  economic  loss 
to  the  State,  it  would  be  necessary  to  give  the  cost  for  medical  service,  etc. 

Before  doing  this  I  wish  to  comment  on  the  figures  given  above,  i.e.,  the 
report  which  gives  13.3  cases  of  sickness  per  100  persons,  with  a  loss  of 


176  SOCIAL  INSURANCE.  [Feb. 

23.6  days  per  case,  or  3.1  per  insured  person.  These  figures  are  quite 
different  from  the  data  of  similar  character  which  Rubinow  l  gives  from 
Austria  and  Germany.  For  Austria  the  figures  are  53  cases  per  100 
persons  insured,  with  seventeen  days  per  case  or  ten  days  per  person.  In 
Germany  it  is  40  cases  per  100,  with  twenty  days  per  case,  or  eight  days 
per  person.  It  is  hard  to  find  the  exact  explanation  of  this  discrepancy. 
It  may  lie  largely  in  the  fact  that  the  benefit  is  paid  only  in  the  more 
serious  cases  of  sickness.  The  truth  of  this  assumption  is  borne  out  by 
the  fact  that  the  average  number  of  days  per  case  is  larger  than  either 
that  of  Germany  or  Austria. 

Another  fact  which  would  help  to  explain  the  situation  is  that  it  is  the 
more  enterprising  men  who  take  advantage  of  the  opportunity  offered 
by  the  unions  of  Massachusetts,  and  therefore  the  ones  who  are  more 
likely  to  be  careful  in  regard  to  their  health.  Under  the  compulsory 
system  all  laborers  are  insured,  and  this  includes,  of  necessity,  many  who 
are  careless  about  their  health,  and  who  are  really  the  ones  to  benefit 
most  from  the  insurance. 

The  figures  of  the  Massachusetts  labor  unions  are,  therefore,  not  as 
valuable  in  determining  the  cost  of  sickness  as  are  approximations  made 
from  Germany's  figures.  I  shall  follow  the  method  of  Mr.  Rubinow.1 

Number  of  persons  eighteen  years  and  over  gainfully  employed  and 

receiving  less  than  $1,200  annually,       .  .          .          .  1,507,373 

Estimated  number  of  days  lost  at  8.5  per  person,  .          .          .       12,812,670. 5 

Estimated  loss  in  wages  at  $1.80  per  day  for  six-sevenths  of  the  days,  $19,468,122. 40 

Medical  cost  at  $1  per  day 12,812,670.50 

Economic  loss  at  50  cents  per  day,      .          .  .       6,489,374.10 


Total  social  and  economic  cost  of  sickness  per  annum  among 

employees  in  Massachusetts,    ......    $38,770,167.00 

The  above  is  an  average  of  $25.70  per  employee. 

Respectfully  submitted,  0 
PAUL  H.  MEANS. 

1  I.  M.  Rubinow:   Social  Insurance  (Chapter  XIII.),  Henry  Hall  &  Co.,  1913,  p.  214. 


1917.] 


HOUSE  — No.  1850. 


177 


REPORT   ON   ACCIDENT   INSURANCE    IN   MASSACHUSETTS 
DURING  THE  YEAR  1915.1 

Population  of  Massachusetts  in  1915, 3,600,000 

Estimated  number  of  employees  over  eighteen  years  receiving  less 

than  $1,200  a  year 1,507,373 

Total  number  of  unions  in  Massachusetts  in  1915,         .          .          .  1,425 

Total  number  of  workers  in  these  unions  in  1915,           .          .          .  243,535 

Computed  per  cent,  of  unions  carrying  accident  insurance,     .  2  32 

Average  monthly  contribution  for  accident  insurance,   .          .          .  $1.12 

Average  weekly  payment  upon  disability,    .          .          .          .          .  4 . 00 

Average  waiting  period  (days),  .......  7.42 

Average  (weeks), 14 

Note.  —  Strike  insurance  was  found  in  40  per  cent,  of  the  unions  paying  $7  weekly. 


Deductions :  — 

Computed  number  of  unions  carrying  accident  insurance, 
Computed  number  of  members,  ..... 

Computed  number  of  unions  not  carrying  accident  insurance, 
Computed  number  of  members,  ..... 

Computed  per  cent,  of  accidents  among  union  members,  . 
Computed  number  of  accidents  per  1,000  population,  . 
Computed  average  number  of  days  of  disablement  per  person, 

Computed  average  wage  in  Massachusetts  in  1914, 

Note.  —  In  1914,  $341,309,517  were  paid  to  606,698  workers. 

Computed  economic  cost  to  organized  labor, 

Computed  total  economic  loss  in  the  State  due  to  accidents, 


456 

77,931 

969 

156,604 
3 

1.25 
27 

$564 


$296,664 
$1,779,984 


Accident  insurance  was  found  in  32  per  cent,  of  the  labor  unions  heard 
from,  and  of  this  about  3  per  cent,  was  regular  life  insurance.  Weekly 
contributions  ranged  from  50  cents  to  $2  a  month,  and  weekly  payments 
for  accidents  ranged  from  $3.50  to  $7  a  week  for  nine  to  twenty  weeks 
in  a  year. 

Since  it  is  reasonable  to  imagine  that  unorganized  labor  has  very  little 
accident  insurance,  and  since  we  have  found  only  32  per  cent,  having 
accident  insurance  among  organized  labor,  it  is  fair  to  hazard  the  state- 
ment that  only  5  to  15  per  cent,  of  the  working  population  of  Massa- 

77,931 


chusetts  carry  insurance  against  accident 


5  per  cent,  approxi- 


1,507,373 

mately.  One  out  of  every  33  workers  (3  per  cent.)  is  found  to  suffer  from 
accident  for  an  average  of  twenty-seven  days  for  each  injured  person 
every  year,  losing  a  total  of  1,180,980  days  (3,281  years),  representing 
a  loss  in  wages  (rate  $564  a  year)  of  $1,779,984.00  a  year. 

Respectfully  submitted, 

A.  E.  0.  MUNSELL. 


Based  on  figures  obtained  in  399  replies  from  1,425  labor  unions.          2  In  1908,  20.5  per  cent. 


178  SOCIAL  INSURANCE.  [Feb. 


REPORT  OF  INVESTIGATIONS  MADE  BY  DR.  W.  W.  WALCOTT 
ON  HEALTH  INSURANCE. 

REPORT  ON  FRATERNAL  ORDERS. 

In  beginning  the  work  on  this  Commission  the  first  problem  was  to 
determine  if  possible  how  the  insurance  situation  is  being  handled  under 
existing  conditions.  The  facts  were  obtained  from  the  records  and  reports 
of  the  Bureau  of  Statistics,  the  State  Commissioner  of  Insurance,  the 
State  Librarian,  the  State  Board  of  Charity,  the  library  of  the  Massa- 
chusetts General  Hospital,  the  Boston  Medical  Library  and  the  Associated 
Charities. 

From  these  sources  it  was  first  necessary  to  sort  out  the  companies 
doing  business  in  Massachusetts  from  other  companies,  and  to  sort  out 
the  Massachusetts  policy  holders  from  Companies  chartered  from  other 
States  but  doing  business  in  Massachusetts.  As  far  as  ordinary  insurance 
companies  are  concerned,  it  was  comparatively  simple  to  obtain  records 
of  receipts,  expenditures,  death  and  sick  benefits,  etc.,  as  practically  all 
of  these  companies  are  required  by  law  to  file  detailed  reports  with  the 
Commissioner  of  Insurance. 

When  we  came  to  fraternal  orders  the  problem  was  somewhat  different. 
While  every  corporation  wishing  to  apply  for  a  charter  to  do  any  kind  of 
insurance  business  —  health,  life  or  accident  —  must  apply  to  the  State 
Commissioner  of  Insurance,  presenting  sample  policy,  a  large  number  are 
incorporated  under  exemption  of  section  12,  chapter  119,  Revised  Laws. 
This  means  that  the  company  so  exempted  does  not  have  to  file  a  report 
with  the  Insurance  Commissioner,  and  the  Insurance  Commissioner  does 
not  know  when  they  cease  to  do  business  and  has  no  way  of  finding  out. 

There  are  116  fraternal  orders  not  incorporated  under  the  exemption 
act  with  accessible  tables  giving  the  following  information :  — 

Date  of  incorporation. 

Location. 

Name  of  president  and  secretary. 

Income:  — 

(a)  Death  and  disability  assessments. 

(6)   All  other  sources. 
Disbursements:  — 

(a)  Death  and  disability  claims. 

(6)  All  other. 

Membership  and  death  claims. 
"Admitted  assets. 
Death  claims. 
Disability  claims. 
Borrowed  money. 

There  was  certain  additional  information  that  it  seemed  desirable  to 
have,  and  a  circular  letter  was  sent  out  to  each  of  the  fraternal  orders 
in  question. 


1917.] 


HOUSE  —  No.  1850. 


179 


To  the  questions  sent  to  the  314  fraternal  organizations  113  replies 
were  received.  Of  these  113  societies  64.6  per  cent.  (73)  paid  a  sickness 
benefit.  The  amount  paid  and  the  period  of  payment  seemed  to  be  very 
similar  to  that  of  labor  unions.  It  is  impossible  to  estimate  the  number 
of  laborers  who  receive  a  sickness  benefit  in  this  way.  It  is  a  larger  pro- 
portion of  the  organizations  of  this  character  than  of  the  labor  unions, 
but  probably  not  a  larger  proportion  of  the  total  number  of  laborers  of 
the  State. 

While  the  volume  of  business  done  by  insurance  companies  above 
mentioned,  and  these  fraternal  orders  that  are  not  exempted  under  the 
exemption  act  from  filing  reports  with  the  Insurance  Commissioner,  rep- 
resents a  large  percentage  of  the  insurance  business  of  this  type,  it  does 
not  by  any  means  represent  the  majority  of  policy  holders.  A  great 
many  people,  whose  number  it  is  impossible  to  estimate,  are  carrying,  or 
have  carried,  for  varying  lengths  of  time,  policies  in  companies  or  mutual 
benefit  associations  incorporated  under  the  exemption  act.  This  means 
that  there  was  no  way  of  getting  records  concerning  them. 

The  following  table  shows  the  exact  condition  of  affairs  as  far  as  the 
exemption  act  is  concerned:  — • 


Number 
applying  for 
a  Charter. 

Number 
incorporated 
under  the 
Exemption 
Act. 

Insurance  corporations  authorized  during  1910,        . 

36 

30 

Insurance  corporations  authorized  during  1911  

47 

46 

Insurance  corporations  authorized  during  1912  
Insurance  corporations  authorized  during  1913,        .... 

35 

48 

34 
45 

Insurance  corporations  authorized  during  1914,        .... 

51 

48 

Totals, 

217 

203 

That  means  that  for  a  five-year  period  217  insurance  companies  doing 
health,  life,  death  or  accident  benefit  insurance  applied  for  a  charter  from 
the  Insurance  Commissioner,  and  that  203  of  them  were  incorporated 
under  the  exemption  act.  Obviously,  no  records  of  the  latter  are  on  file, 
and  it  is  impossible  to  obtain  satisfactory  data  regarding  them. 

These  companies  are  composed  chiefly  of  mutual  benefit  associations 
among  the  foreign-born  population,  often  having  a  very  small  member- 
ship, with  officers  changing  at  least  every  year  and  addresses  changing 
oftener.  A  study  of  these  societies  among  Italians  alone  furnished  a  list 
of  127,  concerning  which,  however,  little  information  could  be  obtained. 
Many  of  the  societies  have  died  after  existing  a  comparatively  short 
time;  others  have  moved  and  changed  their  headquarters;  officers  have 
changed,  moved  or  died,  and,  in  short,  while  considerable  time  was  spent 


180 


SOCIAL  INSURANCE. 


[Feb. 


in  securing  a  list  of  the  Italian  societies  alone,  the  list  was  not  of  any 
practical  use  in  getting  information  as  to  how  this  class  of  people  was 
being  insured,  except  in  a  very  general  way. 

Up  to  date  (Sept.  1,  1916),  from  the  facts  at  hand  it  would  seem  that 
while  a  large  number  of  people  are  being  insured  under  existing  condi- 
tions, there  are  no  available  records  kept  to  determine  either  the  number 
of  people  or  the  manner  of  their  insurance. 

While  this  study  dealt  only  with  the  Italian  societies,  it  is  fair  to  as- 
sume that  similar  conditions  exist  among  companies  or  societies  with  a 
membership  of  other  racial  origins.  The  study  of  the  Italian  situation 
revealed  the  futility  of  attempting  to  follow  up  this  investigation  among 
other  societies. 

The  following  tables  give  certain  essential  facts  concerning  fraternal 
orders  and  the  insurance  companies  in  Massachusetts,  as  well  as  those 
companies  chartered  outside  this  State  but  doing  business  here. 

In  the  work  the  figures  for  1914  had  to  be  used,  as  the  1915  figures  were 
not  available. 


FRATERNAL  BENEFIT  SOCIETIES. 
Table  No.  L 


NAME. 

Incorporated. 

Location. 

Massachusetts  (Lodge  System). 
American  Benefit  Society,         

Jan.      9,  1893 

Boston. 

Degree  of  Honor  of  the  A.  O.  U.  W.  of  Massachusetts, 
Inc. 
Foresters,  Massachusetts  Catholic  Order  of  ,     . 

May    25,  1905 
July    30,  1879 

Boston. 
Boston. 

Fraternal  Helpers,  American  Order  of  

July    13,  1892 

Boston. 

Golden  Star  (Inc.),  United  Order  of  the,         .    '     . 

Apr.    17,  1900 

Haverhill. 

Harugari,  Gross-Loge  des  Deutschen  Ordens  der,  . 

Apr.    17,  1881 

Boston. 

Home  Benefit  Association,  The  

June  23,  1893 

Boston. 

Independent  Workmen's  Circle  of  America,  Inc.,    . 

Dec.     8,  1908 

Boston. 

Labor  League,  Inc.,  

July    12,  1910 

Boston. 

Loyal  Knights  and  Ladies,       

June   18,  1895 

Boston. 

New  England  Order  of  Protection  

Nov.  12,  1887 

Boston. 

Pilgrim  Fathers,  United  Order  of  the  

Mar.    15,  1879 

Lawrence. 

Portuguese  Fraternity  of  the  United  States  of  America, 

Jan.      5,  1899 

Somerville. 

Royal  Arcanum,        

Nov.    5,  1877 

Boston. 

Royal  Michaelense  Autonomic  Beneficent  Association, 
Inc. 
Scottish  Clans  (Inc.),  American  Order  of,        ... 

Aug.    10,  1899 
May      6,  1889 

New  Bedford. 
Boston. 

Sons  of  Israel,  Independent  Order,  

May    26,  1914 

Boston. 

Union  Fraternal  League  

June   19,  1889 

Boston. 

United  Workmen,  Grand  Lodge  of  Massachusetts, 

Feb.      9,  1883 

Boston. 

1917.1 


HOUSE  —  No.  1850. 


181 


Table  No.  1  —  Continued. 


NAME. 

-  - 

Incorporated. 

Location. 

Massachusetts  (Miscellaneous). 
American  Express  Employees  Aid  Society, 

Mar.    14,  1898 

Boston. 

Arlington  Police  Relief  Association,  Inc., 

Sept.     1,  1905 

Arlington. 

Boston  Chamber  of  Commerce,  Gratuity  Fund, 

May    22,  1885 

Boston. 

Boston  Firemen's  Mutual  Relief  Association,  . 

Feb.    18,  1882 

Boston. 

Boston  Fruit  and  Produce  Exchange  Beneficiary  Asso- 
ciation. 
Boston  Letter  Carriers  Mutual  Benefit  Association, 

Nov.     1,  1888 
May    18,  1889 

Boston. 
Boston. 

Boston  Post  Office  Clerks  Mutual  Benefit  Association,   . 

July    19,  1894 

Boston. 

Boston  Teachers  Mutual  Benefit  Association, 

Sept.  20,  1890 

Boston. 

Brockton  Firemen's  Relief  Association,    .... 

Nov.     7,  1887 

Brockton. 

Brockton  Masonic  Benefit  Association,     .... 

Jan.      3,  1894 

Brockton. 

Brookline  Firemen's  Relief  Association,  .... 

May    23,  1887 

Brookline. 

Brookline  Police  Mutual  Aid  Association, 

Nov.     4,  1887 

Brookline. 

Brotherhood  of  Israel,  Inc.,       

June   10,  1913 

Boston. 

Cambridge  Police  Mutual  Aid  Association, 

May    20,  1884 

Cambridge. 

Catholic  Association,  Corporation  of  the  Members  of  the 

Mar.    14,  1891 

Lowell. 

Chelsea  Police  Relief  Association  

Mar.    19,  1889 

Chelsea. 

Commercial  Travellers  Boston  Benefit  Association,  Inc., 

Mar.     7,  1901 

Boston. 

Commercial  Travellers  Eastern  Accident  Association,     . 

Sept.  20,  1894 

Boston. 

Fall  River  Fireman's  Mutual  Relief  Association,    . 

June    14,  1892 

Fall  River. 

Haverhill  Fireman's  Relief  Association,  .... 

Jan.    25,  1887 

Haverhill. 

Hermann's  Benefit  Association,  Inc.,       .... 

Dec.    20,  1901 

Adams. 

Hibernian's  Widows'  and  Orphans'  Fund, 

Dec.     4,  1890 

Marlboro  ugh. 

Knights  of  St.  Stanislaus,  Inc.,         

July    30,  1902 

Chicopee. 

Lawrence  Fire  Department,  Mutual  Relief  Association 
of  the. 
Lawrence  Perchers  Relief  Association,  Inc., 

Mar.    18,  1878 
Dec.    18,  1902 

Lawrence. 
Lawrence. 

Lawrence  Police  Relief  Association  

Apr.    11,  1889 

Lawrence. 

Lawrence  Woolsorters  Benefit  Association,  Inc., 

June   11,  1901 

Lawrence. 

LaLigue  des  Patriotes,       

Mar.    31,  1888 
Nov.  22,  1887 

Fall  River. 
Lowell. 

Lowell  Police  Relief  Association,      

Apr.      5,  1889 

Lowell. 

Lynn  Fire  Department,  Relief  Association  of  the, 

Mar.    25,  1886 

Lynn. 

Madeiran  Alliance  Protective  Association,  The, 

Oct.     10,  1913 

Lowell. 

Marketmen's  Relief  Association,       

July    10,  1912 

Boston. 

Masonic  Casualty  Company,    

Oct.      7,  1895 

Boston. 

Michaelense  Mutual  Aid  Society,  Inc.,     .... 

Apr.    27,  1910 

New  Bedford. 

Monte  Pio  Luso-  Americano  Corp.,  

May      7,  1885 

New  Bedford. 

New  Bedford  Firemen's  Mutual  Aid  Society, 

Sept.  25,  1895 

New  Bedford. 

182 


SOCIAL  INSURANCE. 


[Feb. 


Table  No.  1  —  Continued. 


NAME. 

Incorporated. 

Location. 

Massachusetts  (Miscellaneous)  —  Con. 
New  Bedford  Police  Association,      

Nov.  20,  1890 

New  Bedford. 

Newton  Police  Benefit  Association,           .... 

Jan.     31,  1907 

West  Newton. 

New  York,  New  Haven  &  Hartford  Railroad  Beneficial 
Association. 
Odd  Fellows  Beneficial  Corporation  of  Southern  Massa- 
chusetts.1 
Odd  Fellows  Death  Benefit  Association,  Brockton, 

July    24,  1882 
Mar.    27,  1900 
Nov.  17,  1892 

Boston. 
New  Bedford. 
Brockton. 

Portuguese  Azorian  Operative  Beneficent  Association,    . 

Sept.    8,  1911 

Fall  River. 

Portuguese  Beneficent  Association  of  St.  Michael  the 
Archangel,  Inc. 
Portuguese  Beneficent  Association  of  St.  Peter,  Inc., 

Jan.     22,  1903 
Oct.     23,  1908 

Fall  River. 
Rehoboth. 

Portuguese  Benefit  Society  of  Our  Lady  of  Help,  of 
Peabody,  Inc. 
Portuguese  Benevolent  Society  of  St.  Anthony, 

May      9,  1910 
Oct.     15,  1896 

Peabody. 
Lowell. 

Progressive  Max  Levy  Society  of  New  Bedford,  Inc., 
Quincy  Firemen's  Relief  Association,       .... 

Aug.    13,  1910 
May    21,  1886 

New  Bedford. 
Quincy. 

Red  Men's  Fraternal  Accident  Association  of  America,  ' 

Aug.     4,  1887 

Westfield. 

Revere  Police  Relief  Association  

Sept.  14,  1907 

Revere. 

Salem  Police  Relief  Association,       

Sept.  28,  1895 

Salem. 

Somerville  Firemen's  Relief  Association, 

Mar.    21,  1890 

Somerville. 

Somerville  Police  Relief  Association,        .... 

Jan.     24,  1882 

Somerville. 

Sons  of  Freedom,  Inc.,2     

Dec.      2,  1895 

Boston. 

Southern  Massachusetts  Masonic  Mutual  Relief  Asso- 
ciation. 
Springfield  Police  Relief  Association  

Dec.     4,  1882 
Feb.    17,  1893 

Taunton. 
Springfield. 

Stars  of  Jacob,  »          

Nov.  20,  1912 

Worcester. 

St.  Antonio,  Society  of  

July    31,  1891 

Taunton. 

St.  Casimir,  Society  of,     

Dec.    19,  1896 

Worcester. 

St.  Francis  Benefit  Association,        

Sept.    8,  1896 

Worcester. 

St.  John  the  Baptist,  National  Benevolent  Union  of, 

Oct.     15,  1891 

Haverhill. 

St.  John  the  Baptist  Benevolent  Society  of  Lowell, 

Jan.     19,  1870 

Lowell. 

St.  Jean  Baptiste  Society  of  Marlborough, 

May    24,  1883 

Marlborough. 

St.  Jean  Baptiste  Society  of  North  Adams,     . 

Oct.    22,  1894 

North  Adams. 

St.   John  the  Baptist   Mutual   Benefit  Association  of 
Salem. 
St.  John  the  Baptist,  Society  of  

Jan.     15,  1897 
Sept.  12,  1891 

Salem. 
Webster. 

St.  Jean  Baptiste  de  Worcester,  Massachusetts,  Soci6t6 
de  Bienfaisance.  4 
St.    Joseph's    Benevolent,    Protective    and    Charitable 
Society.  » 

Jan.     10,  1877 
Apr.      8,  1891 

Worcester. 
Fall  River. 

Reincorporated  Jan.  1,  1915,  as  a  stock  accident  company. 

No  report.     Receiver  appointed  Oct.  20,  1914. 

No  business  transacted  for  one  year.    Charter  voided  June  5,  1915. 

Becomes  exempt  June  1,  1915,  under  section  296,  chapter  628,  Acts  of  1911. 

Subject  to  section  29a,  chapter  628,  Acts  of  1911,  since  Jan.  1,  1914. 


1917.] 


HOUSE  —  No.  1850. 


183 


Table  No.  1  —  Concluded. 


NAME. 

Incorporated. 

Location. 

Massachusetts  (Miscellaneous)  —  Con. 
St.  Joseph  Polish  Society,  Inc  

July      8,  1902 

Thorndike. 

Teachers  Annuity  Guild,           

Apr.    21,  1893 

Somerville. 

United  Hebrews  of  America  (Inc.)  Order, 

Sept.    9,  1904 

Boston. 

United  Masonic  Health  and  Accident  Association  Inc., 

Aug.   23,  1907 

Springfield. 

Wellesley  Firemen's  Relief  Association  

Feb.      5,  1914 

Wellesley. 

Winchester  Firemen's  Relief  Association, 

Jan.      7,  1889 

Winchester. 

Worcester  Firemen's  Relief  Association,  .... 

July    27,  1878 

Worcester. 

Worcester  Police  Relief  Association,          .... 

Jan.    23,  1889 

Worcester. 

Other  States  (Lodge  System). 
Artisans  Canadiens-Francais,  La  Soci6t6  des, 

Dec.    28,  1876 

Montreal,  Can. 

Brith  Abraham,  Independent  Order,        .... 

Aug.     2,  1894 

New  York,  N.  Y. 

Brith  Abraham,  United  States  Grand  Lodge, 

Feb.      3,  1900 

New  York,  N.  Y. 

Catholic  Benevolent  Legion,  J  

Sept.    5,  1881 

Brooklyn,  N.  Y. 

Catholic  Knights  of  America,  

Apr.      1,  1880 

St.  Louis,  Mo. 

Catholic  Mutual  Benefit  Association  

June     9,  1879 

Hornell,  N.  Y. 

Foresters,  Catholic  Order  of,     

May    24,  1883 

Chicago,  111. 

Foresters  of  America,  Endowment  Fund,         .         .         . 

- 

Jersey  City,  N.  J. 

Golden  Cross  of  the  World,  United  Order  of  the,    . 

July      4,  1876 

Knoxville,  Tenn. 

Heptasophs,  Supreme  Conclave  Improved  Order,  . 

Aug.   28,  1878 

Baltimore,  Md. 

Knights  and  Ladies  of  Honor,          .         .        . 

Apr.      1,  1878 

Indianapolis,  Ind. 

Knights  of  Columbus,       

Mar.    29,  1882 

New  Haven,  Conn. 

Knights  of  Honor,     

Mar.    20,  1876 

St.  Louis,  Mo. 

Knights  of  Pythias  Insurance  Department,     . 

Aug.     5,  1870 

Indianapolis,  Ind. 

Ladies  Catholic  Benevolent  Association, 

June   28,  1890 

Erie,  Pa. 

Loyal  Association,     

Jan.     18,  1890 

Jersey  City,  N.  J. 

Scottish  Clans  Order  of  Missouri  

July      5,  1881 

Boston,  Mass. 

Sons  of  Benjamin  Independent  Order,     .... 

Sept.  13,  1880 

New  York,  N.  Y. 

St.  Jean  Baptiste  de  Amerique  L'  Union, 

May      7,  1900 

Woonsocket,  R.  I. 

Workmen's  Sick  and  Death  Benefit  Fund,      . 

Feb.    13,  1899 

New  York,  N.  Y. 

Withdrew  from  Massachusetts  March  12,  1915. 


184 


SOCIAL  INSURANCE. 


[Feb. 


Table  No.  2. 


INCOME. 

DISBURSEMENTS. 

•l,r    _. 

NAME. 

Death 
and 
Disability 

A  o 

All  Other 
Sources. 

Death 
and 
Disability 

All 

Other. 

Mem- 
bership 
Dec.  31, 
1914. 

AS" 

sessments. 

Claims. 

Massachusetts  (Lodge  System). 

American  Benefit  Society, 

$68,726 

$13,708 

$68,950 

$11,313 

6,674 

Degree  of  Honor  of  the  A.  O.  U.  W.  of 

10,476 

3,074 

5,800 

2,168 

1,677 

Massachusetts,  Inc. 

Foresters,  Massachusetts  Catholic  Order 

511,248 

57,645 

444,385 

25,551 

39,856 

of.1 

Fraternal  Helpers,  American  Order  of, 

6,973 

2,431 

4,122 

2,307 

396 

Golden  Star  (Inc.),  United  Order  of  the, 

21,061 

1,666 

22,750 

906 

888 

Harugari,    Gross  -Loge   des    Deutschen 

26,571 

2,931 

32,500 

1,060 

2,033 

Ordens  der. 

Home  Benefit  Association,  J   .        .        . 

92,260 

28,568 

75,500 

24,112 

5,514 

Independent     Workmen's     Circle     of 

15,024 

10,070 

12,259 

9,444 

2,423 

America,  Inc. 

Labor  League,  Inc.,         .... 

9,132 

5,305 

8,758 

4,808 

1,939 

Loyal  Knights  and  Ladies,     . 

3,962 

443 

4,000 

569 

192 

New  England  Order  of  Protection,  J 

1,063,183 

68,562 

1,105,308 

60,649 

51,717 

Pilgrim  Fathers,  United  Order  of  the,  » 

406,355 

21,983 

421,100 

22,641 

10,107 

Portuguese   Fraternity  of  the   United 

63,022 

4,812 

62,096 

4,102 

5,002 

States  of  America.  1 

8  600,592 

667,122 

8,766,013 

309,162 

245,986 

Royal  Michaelense  Autonomic  Benef- 

42,508 

4,936 

41,644 

4,992 

4,571 

icent  Association,  Inc.  J 

Scottish  Clans  (Inc.),  American  Order 

3,834 

575 

2,625 

354 

343 

of. 

Sons  of  Israel,  Independent  Order, 

904 

629 

295 

550 

2,362 

Union  Fraternal  League, 

31,509 

12,681 

20,419 

12,768 

2,095 

United  Workmen,  Grand  Lodge  of  Mas- 
sachusetts. 1 

1,178,832 

43,944 

926,000 

37,693 

25,706 

Totals,       

$1?  156,172 

$951,085 

$12,024,554 

$535,199 

409,481 

Massachusetts  (Miscellaneous)  . 

American  Express  Employees  Aid  Soci- 

$14,993 

$426 

$8,468 

$725 

1,161 

ety. 

Arlington    Police    Relief    Association, 

_ 

101 

38 

13 

12 

Inc. 

Boston  Chamber  of  Commerce,  Gratu- 

47,052 

6,807 

62,500 

355 

887 

ity  Fund. 

Boston  Firemen's  Mutual  Relief  Asso- 

42,470 

863 

44,000 

401 

1,326 

ciation. 

Boston   Fruit  and   Produce  Exchange 
Beneficiary  Association. 

10,700 

603 

9,960 

381 

487 

Boston  Letter  Carriers  Mutual  Benefit 

11,845 

16,236 

16,484 

1,696 

1,193 

•  Association. 

Boston  Post  Office  Clerks  Mutual  Bene- 

14,222 

11,095 

13,430 

917 

1,212 

fit  Association. 

Boston  Teachers  Mutual  Benefit  Asso- 

6,099 

7,814 

12,683 

1,108 

755 

ciation. 

Brockton  Firemen's  Relief  Association, 

- 

1,768 

863 

264 

96 

Brockton  Masonic  Benefit  Association, 

3,167 

105 

3,176 

90 

347 

Brookline  Firemen's  Relief  Association, 

- 

1,343 

689 

498 

108 

Brookline  Police  Mutual  Aid  Associa- 

_ 

1,241 

247 

255 

72 

tion. 

1  See  detailed  statement. 


1917.] 


HOUSE  —  No.  1850. 


185 


Table  No.  2  —  Continued. 


INCOME. 

DISBURSEMENTS. 

~Mf 

NAME. 

Death 
and 
Disability 
\s- 

All  Other 
Sources. 

Death 
and 
Disability 

All 
Other. 

Mem- 
bership 
Dec.  31, 
1914. 

sessments. 

Claims. 

Massachusetts  (Miscellaneous)  —  Con. 

Brotherhood  of  Israel,  Inc  

$7,292 

$3,220 

$4,000 

$3,205 

2,331 

Cambridge  Police  Mutual  Aid  Associa- 

_ 

6,254 

5,236 

1,097 

157 

tion. 

Catholic  Association,  Corporation  of  the 

6,204 

4,397 

2,664 

4,017 

810 

Members  of  The. 

Chelsea  Police  Relief  Association, 

- 

1,922 

1,795 

94 

41 

Commercial  Travellers  Boston  Benefit 

35,803 

9,440 

34,900 

9,330 

4,417 

Association,  Inc.  1 

Commercial   Travellers   Eastern   Acci- 

67,644 

19,334 

77,187 

16,114 

8,314 

dent  Association.  ' 

Fall    River    Firemen's    Mutual    Relief 

2,190 

835 

2,500 

131 

137 

Association. 

Haverhill  Firemen's  Relief  Association, 

- 

1,341 

723 

180 

99 

Hermann's-  Benefit  Association,  Inc.,    . 

6,367 

926 

1,600 

214 

1,229 

Hibernian's     Widows'    and     Orphans' 

44,944 

4,150 

45,525 

3,862 

2,569 

Fund. 

Knights  of  St.  Stanislaus,  Inc., 

636 

1,178 

1,176 

559 

181 

Lawrence    Fire    Department,    Mutual 

_ 

1,154 

453 

235 

159 

Relief  Association  of  the. 

Lawrence  Perchers  Relief  Association, 

72 

714 

424 

103 

179 

Inc. 

Lawrence  Police  Relief  Association, 

- 

2,263 

992 

141 

103 

Lawrence  Woolsorters  Benefit  Associa- 

1,583 

534 

1,033 

198 

402 

tion,  Inc. 

La  Ligue  des  Patriotes,  .... 

5,812 

2,267 

5,561 

3,751 

451 

Lowell  Firemen's  Fund  Association, 

- 

3,777 

949 

867 

181 

Lowell  Police  Relief  Association,   . 

- 

2,500 

1,371 

302 

95 

Lynn  Fire  Department,  Relief  Associa- 

_ 

2,082 

1,741 

982 

253 

tion  of  the. 

Madeiran  Alliance  Protective  Associa- 

2,450 

605 

2,434 

237 

286 

tion,  the. 

Marketmen's  Relief  Association,    . 

3,394 

113 

2,428 

944 

747 

Masonic  Casualty  Company,  ! 

31,328 

21,916 

31,314 

20,311 

3,425 

Michaelense  Mutual  Aid  Society,  Inc.,  . 

7,483 

2,319 

8,705 

1,174 

635 

Monte  Pio  Luso-Americano  Corp., 

5,535 

4,091 

5,106 

4,204 

387 

New   Bedford   Firemen's   Mutual   Aid 

_ 

588 

482 

196 

190 

Society. 

New  Bedford  Police  Association,   . 

447 

1,958 

400 

368 

112 

Newton  Police  Benefit  Association, 

335 

405 

- 

141 

74 

New   York,    New   Haven   &   Hartford 
Railroad  Beneficial  Association. 

32,045 

1,404 

31,686 

3,993 

994 

Odd  Fellows  Death  Benefit  Association, 

2,382 

147 

2,423 

129 

294 

Brockton. 

Portuguese   Azorian  Operative  Benefi- 

6,801 

4,996 

6,413 

3,533 

936 

cent  Association. 

Portugxiese    Beneficent    Association    of 

8,112 

4,664 

7,900 

4,442 

1,055 

St.  Michael  the  Archangel,  Inc. 

Portuguese    Beneficent    Association    of 

82 

53 

52 

73 

41 

St.  Peter,  Inc. 

Portuguese  Beneficent   Society  of  Our 

405 

615 

325 

690 

136 

Lady  of  Help,  of  Peabody,  Inc. 

1  See  detailed  statement. 


186 


SOCIAL  INSURANCE. 


[Feb. 


Table  No.  2  —  Continued. 


INCOME. 

DISBURSEMENTS. 

•Er___ 

NAME. 

Death 
and 
Disability 
As- 

All  Other 
Sources. 

Death 
and 
Disability 

All 
Other. 

Mem- 
bership 
Dec.  31, 

1914. 

sAfl«m**nt.s 

Claims. 

1  w*~ 

Massachusetts  (Miscellaneous)  —  Con. 

Portuguese  Benevolent   Society  of   St. 

$3,716 

$368 

$3,594 

$358 

304 

Anthony. 

Progressive  Max  Levy  Society  of  New 

944 

428 

626 

362 

188 

Bedford,  Inc. 

Quincy  Firemen's  Relief  Association,    . 

373 

946 

1,081 

174 

93 

Red  Men's  Fraternal  Accident  Assoica- 

33,857 

25,747 

29,387 

23,576 

3,698 

tion  of  America.  1 

Revere  Police  Relief  Association,  . 

- 

464 

222 

4 

22 

Salem  Police  Relief  Association,    . 

- 

2,055 

1,320 

98 

59 

Somerville  Firemen's  Relief  Association, 

- 

1,965 

1,076 

119 

92 

Somerville  Police  Relief  Association,     . 

- 

3,484 

4,098 

99 

67 

Southern  Massachusetts  Masonic  Mu- 

466 

401 

2,742 

286 

160 

tual  Relief  Association. 

Springfield  Police  Relief  Association,     . 

70 

2,804 

351 

93 

lift 

St.  Antonio,  Society  of,           ... 

9,095 

1,388 

8,849 

1,298 

621 

St.  Casimar,  Society  of,          ... 

- 

1,761 

863 

394 

204 

St.  Francis  Benefit  Association, 

- 

1,913 

678 

855 

244 

St.  John  the  Baptist,  National  Benevo- 

5,192 

1,507 

6,824 

10,913 

491 

lent  Union  of. 

St.  John  the  Baptist  Benevolent  Society 

88 

63 

121 

291 

15 

of  Lowell. 

St.  Jean  Baptiste  Society  of  Marlbor- 

8,971 

3,130 

9,608 

2,520 

563 

ough. 

St.    Jean   Baptiste    Society   of    North 

5,693 

2,318 

4,526 

1,922 

506 

Adams. 

St.  John  Baptist  Mutual  Benefit  Asso- 

8,628 

2,095 

4,583 

2,073 

579 

ciation  of  Salem. 

St.  John  Baptist  Society  of  Webster,     . 

3,773 

1,486 

4,074 

1,041 

323 

St.  Jean  Baptiste  de  Worcester,  Massa- 

2,094 

788 

2,264 

361 

195 

chusetts  Societ6  de  Bienfaisance. 

St.  Joseph's  Benevolent,  Protective  and 

6,200 

1,058 

6,778 

1,306 

658 

Charitable  Society. 

St.  Joseph's  Polish  Society,  Inc.,  . 

48 

375 

254 

163 

101 

Teachers  Annuity  Guild,  *      . 

- 

30,116 

18,012 

910 

1,220 

United    Hebrews    of    America    (Inc.) 

5,536 

9,036 

13,000 

8,634 

2,974 

Order. 

United  Masonic  Health  and  Accident 

15,460 

17,048 

15,705 

14,672 

2,847 

Association,  Inc. 

Wellesley  Firemen's  Relief  Association, 

- 

267 

42 

139 

30 

Winchester   Firemen's    Relief   Associa- 

_ 

189 

76 

6 

23 

tion. 

Worcester  Firemen's  Relief  Association, 

- 

4,609 

1,931 

167 

251 

Worcester  Police  Relief  Association, 

2,619 

5,893 

5,028 

409 

229 

Totals,      

$542,717 

$284,266 

$609,749 

$165,763 

55,949 

Other  States  (Lodge  System). 
Artisans  Canadiens-Francais,  La  Soci6t6 

$712,065 

$227,012 

$417,674 

$83,490 

40,095 

des.i 

Brith  Abraham,  Independent  Order,  *  . 

706,020 

166,156 

707,850 

95,593 

194,490 

See  detailed  statement. 


2  Annuities. 


1917.1 


HOUSE  — No.  1850. 


187 


Table  No.  2  —  Concluded. 


NAME. 

INCOME. 

DISBURSEMENTS. 

Mem- 
bership 
Dec.  31, 
1914. 

Death 
and 
Disability 
As- 
sessments. 

All  Other 
Sources. 

Death 
and 
Disability 
Claims. 

All 
Other. 

Other  States  (Lodge  System)  —  Con. 
Brith  Abraham,  United  States  Grand 
Lodge,  i 
Catholic  Knights  of  America,  1 

$427,944 
527,272 

$99,195 
88,709 

$448,227 
582,348 

$57,007 
28,149 

71,642 
18,220 

Catholic  Mutual  Benefit  Association,  *  . 

1,399,321 

170,326 

1,667,022 

90,347 

64,079 

Foresters,  Catholic  Order  of,  l 

2,204,015 

337,019 

1,548,599 

156,639 

143,914 

Foresters     of     America,     Endowment 
Fund. 
Golden   Cross   of   the   World,    United 
Order  of  the.  » 
Heptasophs,    Supreme    Conclave   Im- 
proved Order.  ' 
Knights  and  Ladies  of  Honor,  *      . 

20,139 
415,626 
1,402,577 
1,404,802 

466 
57,723 
133,709 
157,044 

13,068 
397,519 
1,486,890 
1,461,309 

54,938 
98,915 
123,803 

189 
17,252 
66,887 
65,855 

Knights  of  Columbus,  l  . 

1,263,075 

487,740 

758,200 

316,774 

107,479 

Knights  of  Honor,  * 

1,080,979 

121,857 

1,150,197 

61,530 

15,169 

Knights  of  Pythias,  Insurance  Depart- 
ment. ! 
Ladies    Catholic    Benevolent    Associa- 
tion. » 
Loyal  Association,  l 

2,166,864 
1,338,751 
165,741 

638,662 
228,217 
20,790 

1,501,540 
1,206,136 
173,312 

346,494 
87,820 
17,137 

71,816 
143,139 
6,504 

Scottish  Clans  Order  of  Missouri,  ' 

169,850 

33,301 

135,800 

20,781 

16,873 

Sons  of  Benjamin  Independent  Order,  . 

30,819 

25,436 

23,134 

35,253 

742 

St.  Jean  Baptiste  de  Amerique  L'Un- 
ion.  ! 
Workmen's    Sick    and    Death    Benefit 
Fund,  * 

Totals,       

189,824 
522,441 

94,808 
80,581 

112,627 
500,182 

61,797 
31,014 

26,983 
51,286 

$16  148,125 

$3,168,751 

$14,291,634 

$1,767,481 

1,122,614 

See  detailed  statement. 


188 


SOCIAL  INSURANCE. 


[Feb. 


Table  No.  3. 


NAME. 

Admitted 
Assets. 

Death 
Claims. 

Dis- 
ability 
Claims 

Lia- 
bilities 
(Bor- 
rowed 

Ad- 
vance 
Assess- 

Miscel- 
laneous. 

Money) 

ments. 

Massachusetts  (Lodge  System}. 

American  Benefit  Society,  l 

$56,120 

$36,500 

- 

- 

$15 

$289 

Degree  of  Honor  of  the  A.  O.  U.  W. 

21,849 

1,500 

_ 

_ 

_ 

548 

of  Massachusetts,  Inc. 

Foresters,     Massachusetts    Catholic 

782,073 

40,682 

_ 

_ 

_ 

1,3?8 

Order  of.1 

Fraternal  Helpers,  American  Order 

4,419 

592 

- 

$250 

- 

48 

of. 

Golden  Star  (Inc.),  United  Order  of 

10,297 

20,250 

- 

- 

- 

_ 

the. 

Harugari,  Gross-Loge  des  Deutschen 

27,115 

3,000 

- 

- 

- 

- 

Or  dens  der. 

Home  Benefit  Association,  l 

111,606 

2,500 

- 

- 

- 

1,266 

Independent   Workmen's   Circle   of 

19,051 

250 

$119 

2,190 

235 

710 

America,  Inc. 

Labor  League,  Inc.,  .... 

7,240 

800 

440 

600 

147 

86 

Loyal  Knights  and  Ladies, 

3,005 

1,700 

- 

- 

- 

- 

New  England  Order  of  Protection,  1 

322,437 

75,500 

- 

- 

- 

- 

Pilgrim  Fathers,    United  Order  of 

12,082 

160,900 

_ 

_ 

_ 

125 

the.' 

Portuguese  Fraternity  of  the  United 

20,868 

- 

465 

- 

- 

_ 

States  of  America.  ' 

6,501,491 

792,296 

_ 

_ 

_ 

3,663 

Royal  Michaelense  Autonomic  Be- 

7,462 

6,500 

neficent  Association,  Inc.  l 

Scottish  Clans  (Inc.),  American  Or- 

9,670 

200 

_ 

_ 

• 

_ 

der  of. 

Sons  of  Israel,  Independent  Order,  . 

688 

- 

25 

125 

- 

- 

Union  Fraternal  League,  . 

43,426 

2,172 

723 

- 

- 

970 

United  Workmen,  Grand  Lodge  of 

661,962 

52,000 

_ 

229 

Massachusetts.  l 

Totals  

$8,622,861 

$1,197,342 

$1,772 

$3,165 

$397 

$9,262 

Massachusetts  (Miscellaneous). 

American  Express  Employees  Aid 

$11,001 

$500 

$537 

_ 

_ 

_ 

Society. 

Arlington  Police  Relief  Association, 

3,420 

_ 

_ 

_ 

_ 

_ 

Inc. 

Boston  Chamber  of  Commerce,  Gra- 

146,690 

_ 

_ 

_ 

_ 

_ 

tuity  Fund. 

Boston  Firemen's  Relief  Association, 

4,729 

8,441 

- 

- 

$6 

$300 

Boston  Fruit  and  Produce  Exchange 
Beneficiary  Association. 

3,685 

1,310 

- 

- 

26 

- 

Boston  Letter  Carriers  Mutual  Bene- 

79,371 

_ 

1,626 

_ 

_ 

_ 

fit  Association. 

Boston  Post  Office  Clerks  Mutual 

17,224 

1,000 

455 

_ 

_ 

_ 

Benefit  Association. 

Boston  Teachers  Mutual  Benefit  As- 

139,239 

_ 

1,039  = 

_ 

_ 

_ 

sociation. 

Brockton  Firemen's  Relief  Associa- 
tion. 

14,331 

- 

- 

- 

- 

- 

Brockton  Masonic  Benefit  Associa- 
tion. 

555 

- 

- 

- 

- 

15 

Brookline  Firemen's  Relief  Associa- 

17,934 

_ 

_ 

_ 

_ 

_ 

tion. 

Brookline  Police  Mutual  Aid  Asso- 

26,417 

_ 

111 

_ 

_ 

_ 

ciation. 

Brotherhood  af  Israel,  Inc., 

4,630 

- 

- 

$900 

- 

- 

1  See  detailed  statement. 


1917.1 


HOUSE  — No.  1850. 


Table  No.  3  —  Continued. 


189 


NAME. 

Admitted 
Assets. 

Death 
Claims. 

Dis- 
ability 
Claims 

Lia- 
bilities 
(Bor- 
rowed 
Money) 

Ad- 
vance 
Assess- 
ments. 

Miscel- 
laneous. 

Massachusetts  (Miscellaneous)  —  Con 

Cambridge  Police  Mutual  Aid  Asso- 

$45,283 

_ 

$231 

.. 

_ 

_ 

ciation. 

Catholic  Association,  Corporation  of 
the  Members  of  the. 

39,510 

- 

- 

$5,000 

- 

- 

Chelsea  Police  Relief  Association,     . 

9,346 

- 

- 

- 

- 

- 

Commercial  Travellers  Boston  Bene- 

2,571 

$500 

7,254 

_ 

$307 

_ 

fit  Association,  Inc.  * 

Commercial  Travellers  Eastern  Acci- 

7,853 

20,000 

11,179 

_ 

625 

$750 

dent  Association.  ' 

Fall  River  Firemen's  Mutual  Relief 

16,396 

_ 

_ 

_ 

_ 

_ 

Association. 

Haverhill  Firemen's  Relief  Associa- 

11,451 

- 

_ 

_ 

- 

_ 

tion. 

Hermann's  Benefit  Association,  Inc., 

24,610 

200 

- 

- 

- 

- 

Hibernian's  Widows'  and  Orphans' 

6,699 

11,000 

_ 

_ 

_ 

_ 

Fund. 

Knights  of  St.  Stanislaus,  Inc., 

746 

- 

- 

- 

- 

- 

Lawrence  Fire  Department,  Mutual 

17,099 

_ 

_ 

_ 

_ 

_ 

Relief  Association  of  the. 

Lawrence  Perchers   Relief  Associa- 

2,847 

_ 

_ 

_ 

_ 

71 

tion,  Inc. 

Lawrence  Police  Relief  Association, 

24,057 

- 

- 

- 

- 

- 

Lawrence  Woolsorters  Benefit  Asso- 

7,023 

_ 

_ 

_ 

_ 

_ 

ciation,  Inc.* 

La  Ligue  des  Patriotes,     . 

2,735 

1,500 

- 

3,500 

- 

- 

Lowell  Firemen's  Fund  Association, 

24,197 

- 

- 

- 

- 

- 

Lowell  Police  Relief  Association, 

16,494 

- 

7 

- 

- 

• 

Lynn  Fire  Department,  Association 

23,209 

60 

_ 

_ 

_ 

_ 

of  the. 

Madciran  Alliance  Protective  Asso- 

1,259 

_ 

_ 

_ 

_ 

_ 

ciation,  the. 

Marketmen's  Relief  Association, 

6,989 

- 

- 

- 

- 

- 

Masonic  Casualty  Company,  l  . 

48,897 

300 

4,596 

- 

- 

1,140 

Michaolense    Mutual    Aid    Society, 

116 

_ 

_ 

_ 

_ 

_ 

Inc. 

Monte  Pio  Luso-Americano  Corp.,  . 

24,151 

1,548 

130 

10,500 

1,365 

46 

New  Bedford  Firemen's  Mutual  Aid 

5,472 

_ 

_ 

_ 

_ 

_ 

Society. 

New  Bedford  Police  Association,      . 

21,266 

- 

- 

- 

- 

- 

Newton  Police  Benefit  Association, 

8,048 

- 

- 

- 

- 

- 

New  York,  New  Haven  &  Hartford 

6,761 

4,850 

_ 

_ 

_ 

_ 

Railroad  Henetieial  Association. 

Odd  Fellows  Death  Benefit  Associa- 

913 

_ 

_ 

_ 

_ 

_ 

tion,  Brockton. 

Portuguese  Azorian  Operative  Be- 

8,810 

- 

- 

- 

- 

- 

neficent  Assoeiation. 

Portuguese  Beneficent  Association  of 

15,230 

_ 

_ 

_ 

_ 

_ 

St.  Michael  tin-  An-!i:tii!':cl.  Inc. 

Portuguese  Beneficent  Association  of 
St.  Peter,  Inc. 

481 

- 

- 

- 

- 

- 

Portuguese  Benefit  Society  of  Our 

2,963 

_ 

_ 

2,000 

_ 

_ 

I.ady  of  Help,  of  IVabody,  Inc. 

Portuguese   Benevolent   Society   of 

784 

628 

- 

24 

- 

- 

St.  Anthony. 

Progressive    Si  ax    Levy   Society   of 

2,050 

- 

- 

- 

- 

- 

New  Bedford,  Inc. 

»  See  detailed  statement. 


190 


SOCIAL  INSURANCE. 


[Feb. 


Tabk  No.  3  —  Continued. 


NAME. 

Admitted 

Assets. 

Death 
Claims. 

Dis- 
ability 
Claims. 

Lia- 
bilities 
(Bor- 
rowed 

Ad- 
vance 

Assess- 

Miscel- 
laneous. 

Money). 

ments. 

Massachusetts  (Miscellaneous)  —  Con. 

Quincy    Firemen's    Relief   Associa- 

$7,603 

- 

- 

- 

_ 

- 

tion. 

Red  Men's  Fraternal  Accident  Asso- 

44,222 

$700 

$6,190 

_ 

$93 

$4,890 

ciation  of  America.  l 

Revere  Police  Relief  Association,      . 

3,016 

- 

- 

- 

- 

•- 

Salem  Police  Relief  Association, 

23,623 

-' 

- 

- 

- 

- 

Somerville  Firemen's  Relief  Associa- 

15,785 

_ 

_ 

_ 

_ 

_ 

tion. 

Somerville  Police  Relief  Association, 

35,892 

- 

- 

- 

- 

- 

Southern    Massachusetts    Masonic 

7,828 

161 

_ 

_ 

_ 

_ 

Mutual  Relief  Association. 

Springfield  Police  Relief  Association, 

20,354 

- 

45 

- 

- 

- 

St.  Antonio,  Society  of,     . 

633 

600 

- 

- 

- 

- 

St.  Casimar,  Society  of,    . 

7,802 

- 

- 

- 

- 

- 

St.  Francis  Benefit  Association, 

3,230 

- 

- 

- 

- 

- 

St.  John  the  Baptist,  National  Be- 

40,327 

_ 

355 

$15,000 

_ 

_ 

nevolent  Union  of. 

St.  John  the  Baptist  Benevolent  So- 

_ 

_ 

_ 

_ 

_ 

_ 

ciety  of  Lowell. 

St.  Jean  Baptiste  Society  of  Marl- 

29,657 

2,463 

158 

- 

_ 

_ 

borough. 

St.  Jean  Baptiste  Society  of  North 

33,881 

- 

_ 

_ 

_ 

_ 

Adams. 

St.  John  the  Baptist  Mutual  Benefit 

24,633 

_ 

_ 

_ 

_ 

_ 

Association  of  Salem. 

St.  John  the  Baptist  Society  of  Web- 

18,138 

338 

71 

_ 

_ 

_ 

ster. 

St.  Jean  Baptiste  de  Worcester,  Mas- 

8,190 

293 

_ 

_ 

_ 

_ 

sachusetts,  Societ6  deBienfaisance. 

St.  Joseph's  Benevolent,  Protective 

3,919 

500 

_ 

_ 

„ 

180 

and  Charitable  Society. 

St.  Joseph's  Polish  Society,  Inc., 

441 

- 

- 

- 

- 

- 

Teachers  Annuity  Guild, 

214,932 

- 

8,2102 

- 

- 

- 

United  Hebrews  of  America  (Inc.) 

18,679 

1,000 

_ 

_ 

54 

459 

Order. 

United  Masonic  Health  and  Accident 

11,215 

200 

3,235 

_ 

979 

_ 

Association,  Inc. 

Wellesley  Firemen's  Relief  Associa- 

2,091 

_ 

_ 

_ 

_ 

_ 

tion. 

Winchester  Firemen's  Relief  Associa- 

4,342 

_ 

_ 

_ 

_ 

_ 

tion 

Worcester  Firemen's  Relief  Associa- 

29,748 

_ 

_ 

_ 

_ 

_ 

tion. 

Worcester  Police  Relief  Association, 

61,743 

- 

- 

- 

- 

- 

Totals  

$1,577,472 

$58,092 

$45,429 

$36,924 

$3,455 

$7,851 

Other  States  (Lodge  System). 

Artisans     Canadiens-Francais,     La 
Societe  des.  » 

$2,641,309 

$27,426 

$4,509 

- 

$3,382 

$2,155,800 

Brith   Abraham,    Independent   Or-  . 
der.  l 

746,421 

161,750 

2,000 

$8,000 

- 

29,250 

Brith     Abraham,     United     States 
Grand  Lodge  l 

232,183 

104,059 

- 

.  7,500 

1,695 

4,386 

Catholic  Knights  of  America,  l 

1,185,387 

19,966 

- 

- 

- 

1,311 

Catholic    Mutual    Benefit    Associa- 
tion. 1 

1,918,445 

295,763 

- 

- 

- 

444 

Foresters,  Catholic  Order  of,  l  . 

4,644,281 

196,290 

- 

- 

- 

867 

1  See  detailed  statement. 


Includes  $3,530  gratuities. 


1917.] 


HOUSE  —  No.  1850. 


191 


Table  No.  3  —  Concluded. 


NAME. 

Admitted 

Assets. 

Death 
Claims. 

Dis- 
ability 
Claims. 

Lia- 
bilities 
(Bor- 
rowed 

Ad- 
vance 
Assess- 

Miscel- 
laneous. 

Money). 

ments. 

Other  States  (Lodge  System)  —  Con. 

Foresters  of  America,  Endowment 

$18,829 

_ 

_ 

_ 

_ 

_ 

Fund. 

Golden  Cross  of  the  World,  United 

230,990 

$77,836 

_ 

- 

- 

$1,015 

Order  of  the.  » 

Heptasophs,  Supreme  Conclave  Im- 

684,136 

382,461 

_ 

- 

- 

2,489 

proved  Order.  J 

Knights  and  Ladies  of  Honor,  l 

627,210 

211,340 

- 

- 

$293 

1,352 

Knights  of  Columbus,  1     . 

5,348,293 

117,000 

- 

- 

- 

5,776 

Knights  of  Honor,  »  . 

531,228 

540,863 

- 

$70,000 

- 

92 

Knights  of  Pythias  Insurance  De- 

7,013,691 

125,786 

_ 

. 

20,477 

5,829,740 

partment. 

Ladies  Catholic  Benevolent  Associa- 

3,053,059 

79,922 

- 

.- 

- 

- 

tion  .1 

Loyal  Association,  J   . 

110,500 

17,000 

- 

- 

- 

- 

Scottish  Clans  Order  of  Missouri,  1    . 

252,047 

22,400 

- 

- 

- 

- 

Sons  of  Benjamin  Independent  Or- 

6,513 

969 

_ 

_ 

_ 

125 

der. 

St.    Jean    Baptiste     de     Amerique 

751,784 

9,000 

$1,770 

_ 

1,927 

108 

L'Union.  ' 

Workmen's  Sick  and  Death  Benefit 

832,703 

26,721 

8,625 

- 

176 

197 

Fund,  i 

Totals  

$30,829,009 

$2,416,552  !  $16,904 

$85,500 

$27,950 

$8,032,952 

Summary. 

Massachusetts  (lodce  system),  . 

$8,622,861 

$1,197,342 

$1,772 

$3,165 

$397 

$9,262 

Massachusetts  (miscellaneous), 

1,577,472 

58,092 

45,429 

36,924 

3,455 

7,851 

Other  States  (lodge  system  \     . 

30,829,009 

2,416,552 

16,904 

85,500 

27,950 

8,032,952 

Grand  totals,       .... 

$41,029,342 

$3,671,986 

$64,105 

$125,589 

$31,802 

$8,050.065 

1  See  detailed  statement. 


192 


SOCIAL  INSURANCE. 


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HOUSE  — No.  1850. 


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196  SOCIAL  INSURANCE.  [Feb. 


REPORT  OF  INQUIRY  CONDUCTED  IN  THE  MIDDLE  WEST. 

In  October  and  November  of  this  year  certain  plants  in  Chicago,  De- 
troit, Flint  and  Pittsburg,  where  establishment  funds  or  employees'  bene- 
fit associations  are  maintained,  were  visited  with  Dr.  B.  S.  Warren  of 
the  United  States  Public  Health  Service. 

The  various  plans,  and  types  were  studied,  compared  and  analyses 
made. 

All  had  many  points  in  common,  and  to  avoid  repetition  and  needless 
detail  four  only  will  be  discussed  fully,  one  each  in  Chicago,  Detroit, 
Flint  and  Pittsburg. 

The  essential  points  of  variation  in  the  other  funds  will  then  be  brought 
out. 

The  following  summary  of  the  administration  of  the  establishment 
fund  and  employees'  benefit  association  of  an  automobile  company, 
which  represents  a  certain  type,  is  of  interest :  — 

The  object  of  the  society  is  the  establishment  and  management  of  a  fund  to  be 
known  as  the  "benefit  fund,"  for  the  payment  of  definite  amounts  to  employees 
contributing  thereto,  who  are  to  be  known  as  "members,"  when  under  the  regula- 
tions they  are  entitled  to  such  payment;  and  the  establishment  and  administration 
of  a  service  pension  fund  and  the  establishment  of  such  other  funds  or  plans  as 
may,  from  time  to  time,  be  determined  upon  by  the  company,  the  general  man- 
ager or  advisory  committee. 

The  general  manager  appoints  a  superintendent  who  has  charge  of  all  business 
pertaining  to  the  society.  He  employs  such  clerks  and  other  assistants,  subject  to 
approval  of  the  general  manager,  as  are  necessary,  prescribes  the  forms  and  blanks 
to  be  used,  certifies  all  bills  and  pay  rolls  of  the  society,  signs  all  warrants  for  pay- 
ments of  benefits  and  other  authorized  expenses,  furnishes  the  committee  such  re- 
ports as  they  require,  decides  all  questions  properly  referred  to  him,  and  exercises 
such  other  authority  as  is  conferred  upon  him  by  the  general  manager  or  by  the 
committee. 

There  is  a  medical  director  and  one  or  more  medical  examiners,  and  such  other 
attendants  as  are  required,  appointed  by  the  general  manager.  The  medical 
director,  subject  to  the  control  and  approval  of  the  superintendent,  has  general 
supervision  of  the  medical  and  surgical  affairs  of  the  society. 

The  medical  director  and  medical  examiners  make  the  required  physical  exam- 
inations of  applicants  for  membership  and  changes  in  class  in  the  benefit  fund, 
report  the  condition  of  sick  and  injured,  advise  and  prescribe  for  sick  members  at 
the  office  of  the  society,  or  elsewhere,  as  the  superintendent  directs,  decide  when 
members  are  disabled  and  when  they  are  able  to  work,  and  perform  such  pro- 
fessional and  other  duties  as  is  required  by  the  superintendent. 

The  medical  director  and  medical  examiners  render  professional  service  only 
in  the  medical  examiner's  office,  unless  otherwise  directed  by  the  superintendent, 
and  do  not  accept  fees  or  other  remuneration  for  such,  or  other  service,  under  any 
circumstances. 

The  benefit  fund  consists  of  contributions  from  members  thereof,  income  derived 
from  investments  and  appropriations,  loans  or  gratuities  by  the  company  or  others. 

The  moneys  received  for  the  benefit  fund  are  held  by  the  company  in  a  separate 
account  in  trust  for  the  society.  The  committee  directs  the  investment  of  money 
which  is  not  required  for  immediate  use. 

The  company,  being  the  trustee  and  guarantor  of  the  benefit  fund,  the  invest- 


1917.]  HOUSE  — No.  1850. 

ments  are  in  such  securities  as  are  approved  by  the  general  manager,  and  are  in 
the  name  of  the  company  "  in  trust  for  the  society." 

If  the  amount  contributed  by  members  of  the  benefit  fund,  with  interest  and  other 
income,  is  not  sufficient  to  pay  the  benefits  as  they  become  due,  the  company  ad- 
vances from  its  own  treasury  whatever  sums  may  be  necessary  for  this  purpose, 
reimbursing  itself  with  interest  at  the  rate  of  5  per  cent,  per  annum  when  the  con- 
tributions of  members  and  other  income  are  sufficient  therefor. 

If  at  any  time  there  is  a  surplus,  after  making  due  allowance  for  liabilities, 
greater  than  seems  necessary  to  meet  current  benefits  and  to  provide  a  reasonable 
contingent  fund,  such  surplus  is  used  in  reducing  the  rates  of  contribution  or  in- 
creasing the  benefits  to  members  in  such  a  manner  as  is  determined  by  a  vote  of 
two-thirds  of  a  quorum  of  the  committee. 

The  condition  of  the  account  books  of  the  benefit  fund  at  the  close  of  each 
fiscal  year  is  audited  and  reported  upon  by  a  competent  person  or  persons,  selected 
for  that  purpose  by  the  committee. 

There  is  an  advisory  committee  of  20  members  and  a  chairman,  all  of  whom, 
to  be  eligible,  must  be  members  of  the  benefit  fund,  constituted  as  follows:  — 

The  general  manager  of  the  company  is  ex  officio  a  member  and  chairman  of  the 
committee,  and  he  has  power  to  appoint  any  other  person  to  represent  him  as 
chairman  and  cast  his  vote  at  any  meeting  of  the  committee  which  he  is  unable  to 
attend. 

The  other  members  of  the  committee  are  chosen  annually  in  November  to  serve 
one  year  from  the  first  day  of  January  next  succeeding,  or  until  their  successors 
are  chosen,  as  follows:  — 

One-half  is  appointed  by  the  general  manager,  and  one-half  elected  by  the  em- 
ployees who  are  members  of  the  benefit  fund,  from  among  themselves  on  basis 
of  membership,  in  the  different  departments,  as  provided  in  the  following  regu- 
lation: — 

The  members  of  the  committee  chosen  by  members  of  the  benefit  fund  are  elected 
by  ballot.  One  member  is  elected  from  each  of  ten  subdivisions  of  the  works  and 
offices  known  as  "election  districts,"  such  districts  being  apportioned  and  rear- 
ranged annually  according  to  membership  in  the  benefit  fund,  and  duly  announced 
by  shop  bulletin  notices  a  reasonable  time  before  each  annual  election:  provided, 
however,  that  the  division  of  the  works  known  as  the  body  plant  is  represented  by 

at  least  two  members,  and  that  division  of  the  works  known  as  the. ..;••. 

is  represented  by  at  least  two  members.  The  ballots  are  taken  and  the  count 
certified,  under  oath,  by  tellers.  The  member  receiving  the  greatest  number  of 
legal  ballots  in  and  from  his  individual  district  is  declared  elected. 

The  members  to  serve  upon  the  committee  for  the  first  year  are  chosen  by  the 
general  manager  from  the  various  election  districts,  restricted  in  accordance  with 
section  16  of  these  regulations. 

The  election  tellers  are  selected  by  the  shop  members  of  the  advisory  committee, 
but  no  member  of  the  fund  known  to  be  a  candidate  for  membership  on  the  advisory 
committee,  nor  any  member  of  the  advisory  committee,  is  eligible  for  appointment 
as  a  teller. 

No  officer,  foreman,  assistant  foreman,  inspector,  boss  or  office  employee  of  the 
company  is  eligible  for  election  to  represent  the  members. 

In  balloting  for  members  of  the  committee  each  member  of  the  benefit  fund  in 
good  standing  is  entitled  to  cast  one  vote,  but  no  voting  by  proxy  is  permitted. 

In  event  of  termination  of  service  of  any  member  of  the  committee,  or  of  his 
withdrawal  from  or  loss  of  membership  in  the  benefit  fund,  his  membership  on  the 
committee  thereupon  terminates. 

Any  vacancy  among  the  members  elected  by  the  contributing  employees  is 
filled  by  the  succession  to  the  position  of  the  employee  who  received  the  next  highest 
number  of  votes  of  members  of  the  same  district  from  which  the  retiring  member 
was  elected  at  the  last  election,  and  in  default  of  any  such  person  the  majority  of 


198  SOCIAL  INSURANCE.  [Feb. 

the  elected  members  of  the  advisory  committee  fills  the  vacancy  by  electing  a 
member  from  the  same  district  as  the  retiring  member. 

Any  vacancy  among  the  members  chosen  to  represent  the  company  is  filled  by 
appointment  by  the  general  manager. 

Such  members,  and  the  members  as  chosen  by  the  general  manager  for  the  original 
committee,  serve  until  their  successors  are  chosen  as  above  provided. 

The  superintendent  is  ex  officio  secretary  of  the  committee,  but  not  a  member 
thereof. 

The  committee  has  general  supervision  of  the  operations  of  the  society,  and  sees 
that  they  are  conducted  in  accordance  with  the  regulations. 

The  committee  holds  stated  meetings  once  in  three  months,  at  such  time  and 
place  as  the  chairman  determines,  and  meets  at  other  times  at  the  call  of  the  chair- 
man. A  quorum  of  the  advisory  committee  consists  of  ten  members  and  the 
chairman.  Not  less  than  'five  members  who  have  been  elected,  and  five  who  have 
been  appointed  by  the  general  manager,  are  necessary  to  constitute  a  quorum  at 
any  meeting. 

It  is  the  duty  of  the  chairman  to  call  special  meetings  of  the  committee  upon  the 
written  request  of  five  of  its  members. 

Amendments  to  the  regulations  of  the  society  are  proposed  to  the  committee  at 
any  meeting  by  any  member  of  the  committee.  Amendments  so  proposed  are 
acted  upon  at  any  subsequent  meeting,  but  no  amendment  is  operative  unless 
adopted  by  a  vote  in  the  affirmative  of  a  majority  of  the  whole  committee,  and 
duly  announced  by  the  superintendent;  and  any  amendment  so  adopted  and 
announced  is  binding  upon  the  members  of  the  benefit  fund  ard  all  persons  claiming 
through  them  from  the  date  specified  in  the  announcement  of  the  same. 

Membership  in  the  benefit  fund  is  based  upon  an  application  in  the  following 
form:  — 


PRINCIPAL  APPLICATION  FOR  MEMBERSHIP  IN  THE  BENEFIT  FUND  OF  THE  COM- 
PANY. 
To  the  Superintendent  of  the Mutual  Benefit  Society. 

I, of in  the  county  of 

and   State   of now   employed   by 

Company  at  its  works,  do  hereby  apply  for  member- 
ship in  the  benefit  fund  of  the Society,  and  consent  and  agree 

to  be  bound  by  the  regulations  of  said  society,  which  regulations  I  have  read  or 
have  had  read  to  me,  and  by  any  other  regulations  of  said  society  hereafter  adopted 
and  in  force  during  my  membership. 

/  alao  agree,  That  the  said  company,  by  its  proper  agents,  and  in  the  manner 
provided  in  said  regulations,  shall  apply,  as  a  voluntary  contribution  from  any 

wages  earned  by  me  under  said  employment,  the  sum  of .  cents  per 

week  for  the  purpose  of  securing  the  benefits  provided  in  the  regulations  for  a 
member  of  the  benefit  fund  of  the class. 

Unless  I  shall  hereafter  otherwise  designate  in  writing,  with  the  approval  of  the 

superintendent  of  the Society,  death  benefit  shall  be  payable 

to  my  wife  (name  in  full) if  I  am  married  at  the  time 

of  my  death,  provided  I  have  given  written  notice  of  my  marriage  to  the  superin- 
tendent of  the  benefit  society;  or  if  I  have  no  wife  living,  then  to  my  children 
collectively,  each  to  be  entitled  to  an  equal  share;  or  if  there  be  no  such  children 

living,  then  to  my  (friend  or  relative)  name of 

if  living;  and  if  not  living,  then  to  my  father  and  mother  jointly  or  the  survivor; 
or,  if  neither  be  living,  then  to  my  next  of  kin,  payment  in  behalf  of  such  next  kin 
to  be  made  to  my  legal  representatives;  or,  if  there  be  no  such  next  of  kin,  the  death 
benefit  shall  lapse  and  the  amount  thereof  shall  remain  as  a  part  of  the  benefit  fund 
without  claim  for  the  same. 


1917.]  HOUSE  — No.  1850.  199 

Any  funeral  or  other  expenses  incident  to  my  death,  which  shall  have  been  paid 
by  the  superintendent  of  the Society,  in  accordance  with  the  regu- 
lations, shall  be  held  to  be  in  part  payment  of  said  death  benefit,  and  shall  be 
deducted  from  the  total  amount  thereof  before  payment  to  the  person  or  persons 
entitled  to  receive  the  same. 

I  also  agree,  That  this  application  upon  approval  by  the  superintendent  of  the 
society  shall  make  me  a  member  of  the  benefit  fund  on  and  from  the  date  specified 
in  such  approval,  and  constitute  a  contract  between  myself  and  the  said  company; 
and  that  the  same  shall  not  be  voided  by  any  change  in  the  character  of  my  service, 
or  locality  where  rendered,  while  in  the  employment  of  said  company,  nor  by  any 
change  in  the  amounts  applicable  from  my  wages  to  the  benefit  fund,  which  I  may 
hereafter  consent  to;  and  that  the  agreement  that  the  above-named  amount  shall 
be  appropriated  from  my  wages  shall  also  apply  to  any  other  amounts  which  I  may 
agree  to  pay  under  the  provisions  of  said  regulations  by  reason  of  changes  made  as 
aforesaid,  and  shall  constitute  an  appropriation  and  assignment  in  advance  of 
such  portion  of  my  wages,  to  the  said  company  in  trust  for  the  benefit  fund,  for 
the  purpose  of  maintaining  my  membership  therein,  which  assignment  shall  have 
precedence  over  any  other  assignment  by  me  of  my  wages,  or  of  any  claim  upon 
them  on  account  of  liabilities  incurred  by  me. 

I  also  agree,  For  myself  and  those  claiming  through  me,  to  be  specially  bound  by 

regulation  numbered ,  providing  for  final  and  conclusive  settlement  of 

all  claims  for  benefit  or  controversies  of  whatsoever  nature  by  reference  to  the 

superintendent  of  the Society,  and  an  appeal  from  his  decision  to 

the  advisory  committee. 

I  also  agree,  That  any  .untrue  or  fraudulent  statement  made  by  me  to  {he  medical 
examiner  or  to  the  medical  director,  or  any  concealment  of  facts  in  this  application, 
or  any  attempt  on  my  part  to  defraud  or  impose  upon  said  benefit  fund,  or  my 
resigning  from,  or  leaving  the  service  of  said  company,  or  my  being  relieved,  in- 
definitely suspended  or  discharged  therefrom,  shall  forfeit  my  membership  in  said 
benefit  fund,  and  all  benefits,  rights  or  equities  arising  therefrom,  except  that  such 
termination  of  my  employment  shall  not  (in  the  absence  of  any  of  the  other  fore- 
going causes  of  forfeiture)  deprive  me  of  any  benefits  to  the  payment  of  which  I 
may  be  entitled  by  reason  of  disability  beginning  and  reported  before  and  con- 
tinuing without  interruption  to  and  after  such  termination  of  my  employment,  as 
provided  in  said  regulations. 

/  certify,  That  I  am  correct  and  temperate  in  my  habits;  that,  as  far  as  I  am 
aware,  I  am  now  in  good  health,  and  have  no  injury  or  disease,  constitutional  or 
otherwise,  except  as  shown  on  the  accompanying  statement  made  by  me  to  the 
medical  officer,  which  statement  shall  constitute  a  part  of  this  application. 

In  witness  whereoj,  I  have  signed  these  presents  at ,  in  the 

county  of ,  State  of this day  of 

,  A.D.  191 ,  this  application  to  take  effect  at  once,  or 

on  such  subsequent  date  as  may  be  designated  by  said  superintendent:  provided, 
however,  that  if  I  become  disabled  before  said  date  and  continue  disabled  beyond 
said  date  this  application  shall  not  take  effect  until  the  first  day  after  my  recovery. 


Signature  of  Applicant. 
No Department. 

Witness: Residence 

The  foregoing  application  is  approved  at  the  office  of  the  superintendent  at 
. .  this day  of A.D.  19     . 


Superintendent  of Society. 

The  application  in  the  foregoing  form  which  is  made  by  an  employee  is  known 
as  his  "principal  application." 


200  SOCIAL  INSURANCE.  [Feb. 

Upon  the  approval  of  the  principal  application  by  the  superintendent  the  appli- 
cant is  a  member  on  and  from  the  date  specified  in  such  approval,  and  the  super- 
intendent issues  to  him  a  certificate  of  membership  attached  to  a  copy  of  the  regu- 
lations then  in  force. 

A  special  form  of  supplementary  application  is  used  by  members  applying  to 
enter  higher  classes. 

If  any  applicant  for  membership  or  for  change  in  membership  has  any  physical 
defect  which  precludes  the  approval  of  his  application  if  presented  unconditionally, 
his  application  may  nevertheless  be  approved,  provided  that  he  executes  an  agree- 
ment in  writing,  satisfactory  to  the  superintendent,  to  the  effect  that  he  is  not 
entitled  under  his  membership  to  any  benefits  for  disability  caused  by,  arising  from, 
or  growing  out  of  such  defect,  such  agreement  to  be  attached  to  and  made  a  part 
of  his  said  application,  and  such  modification  of  the  foregoing  prescribed  forms  of 
principal  application  and  supplemental  application  is  hereby  authorized. 

In  case  an  applicant  for  membership,  or  for  change  in  membership,  should  be 
rejected  solely  on  account  of  unfavorable  health  history,  either  family  or  personal, 
or  for  other  just  causes,  he  may  be  eligible  for  partial  membership  on  recommenda- 
tion of  the  medical  director  and  the  approval  of  the  superintendent.  For  such 
partial  membership  he  contributes  at  the  regular  rates  for  the  full  membership,  and 
is  eligible  for  half  rate  for  disability  or  death  benefits. 

All  male  employees  of  the  company  under  the  regulations  are  contributors  to 
the  benefit  fund,  and  are  designated  as  "members  of  the  benefit  fund." 

In  referring  to  employees  of  the  company  the  word  "service"  means  employment 
by  this  company,  and  the  service  of  any  employee  is  regarded  as  continuous  for 
the  time  during  which  he  is  continuously  in  the  employ  of  this  company. 

There  are  three  classes  of  members.  The  highest  class  in  which  an  employee 
may  be  a  member  is  determined  by  the  findings  of  the  physical  examination,  and 
by  the  amount  of  his  average  monthly  earnings,  as  followrs:  — 


MONTHLY  PAY. 

Class. 

Less  than  $40  

First 

$40  or  more,  but  loss  than  $81,    
$81  or  more,          

Second. 
Third 

Any  male  employee  who  is  in  the  employ  of  the  company  on , 

upon  approval  of  his  application  by  the  superintendent  becomes  a  member  in  the 
highest  class  allowed  by  his  pay,  or  in  any  lower  class. 

Any  member  not  over  sixty  years  of  age  upon  passing  a  satisfactory  physical 
examination,  and  approval  of  his  application  by  the  superintendent,  changes  to 
any  higher  class  allowed  by  his  pay,  such  change  becoming  effective  thirty  days 
after  formal  approval  by  said  superintendent. 

Any  member  may,  upon  the  first  day  of  any  month,  change  to  a  lower  class,  upon 
written  notice  to  the  superintendent  on  the  prescribed  form,  before  the  fifteenth 
day  of  the  month  preceding. 

An  employee  cannot  remain  a  member  in  a  higher  class  than  that  allowed  by  his 
pay. 

If  a  member  declines  to  effect  a  proper  reduction  of  class  under  the  foregoing, 
the  superintendent  has  authority  to  cancel  his  membership. 

The  superintendent  has  authority  to  reduce  the  class  or  to  cancel  the  member- 
ship of  any  member  upon  receiving  reliable  evidence  of  habitual  or  frequent  drunken- 
ness, disreputable  or  unlawful  conduct  at  any  time,  or  for  persistent  disregard  of 


1917.]  HOUSE  — No.  1850.  201 

the  regulations  of  the  society  by  such  member  when  disabled.  Written  notice  of 
such  cancellation  of  membership  is  given  the  member,  and  refund  of  contribution, 
if  any  be  due,  accompanies  the  notice  and  is  specifically  mentioned  therein. 

Any  member  who  is  furloughed,  suspended  or  otherwise  temporarily  relieved 
from  the  service  for  a  specified  time,  not  to  exceed  two  months,  retains  his  mem- 
bership during  such  absence,  subject  to  the  approval  of  the  superintendent,  by 
paying  his  contribution  in  advance.  Ho  notifies  the  superintendent  at  the  be- 
ginning of  such  absence,  specifying  the  time  set  for  return  to  duty,  and  if  at  that 
time  the  member  does  not  return  to  duty  his  membership  in  the  benefit  fund  there- 
upon terminates  unless  otherwise  previously  arranged  by  him  with  the  superin- 
tendent. 

If  any  member,  who  is  furloughed,  suspended  or  otherwise  temporarily  relieved 
from  the  service  for  a  specified  time,  but  retains  his  membership  during  the  period 
of  such  furlough,  suspension  or  relief  from  service,  engages  his  services  to  any  other 
person,  firm  or  corporation  for  hire,  and  during  the  continuance  of  such  service  and 
in  the  performance  of  the  duties  thereof  sustains  injuries,  partially  or  totally  dis- 
abling him,  then  he  is  not  entitled  to  draw  benefits. 

When  a  member  resigns  from  the  service,  or  leaves  the  service  without  notice, 
or  is  relieved  or  discharged  therefrom,  or  indefinitely  suspended  from  duty,  his 
membership  in  the  benefit  fund  terminates  with  his  employment,  and  he  is  not 
entitled  to  any  benefits  for  time  thereafter,  except  such  as  he  is  entitled  to  by 
reason  of  disability  beginning  and  reported  before  and  continuing  without  in- 
terruption to  and  after  such  termination  of  employment. 

When  any  member  absents  himself  from  duty  for  a  period  of  six  days  without  the 
permission  of  his  employing  officer  previously  obtained,  or  without  giving,  mean- 
while, reasons  for  absence  satisfactory  to  his  employing  officer,  he  is  held  to  have 
left  the  service  without  notice,  and  his  membei'ship  is  held  to  have  terminated  on 
the  day  preceding  such  absence.  If  such  member  is  reinstated  in  the  service  he  is 
also  reinstated  in  membership  upon  approval  of  the  superintendent. 

If  a  member  is  relieved  from  the  service  and  is  afterwards  re-employed  he  be- 
comes a  member  of  the  benefit  fund,  although  then  over  sixty  years  of  age,  upon 
application  at  the  time  of  his  employment,  upon  passing  a  satisfactory  physical 
examination  in  which  his  physical  condition  at  the  termination  of  former  employ- 
ment is  given  due  consideration,  and  upon  approval  of  his  application  by  the 
superintendent. 

When  a  member  is  in  arrears  for  four  weeks  his  membership  thereupon  ceases. 
If  a  member  resumes  work  for  the  company  before  he  has  been  in  arrears  four 
weeks  he  is  protected  from  the  time  of  resuming  work,  subject  to  the  approval  of 
the  medical  director  and  the  superintendent,  and  the  arrears  are  paid  on  the  next 
pay  roll. 

Members  keep  the  superintendent  of  the  benefit  society  informed  of  their  ad- 
dresses and  of  any  change  therein.  A  member's  place  of  residence  when  on  duty 
is  held  to  be  the  last  address  given  the  benefit  society. 

The  word  "contributions,"  wherever  used  in  these  regulations,  is  held  and  con- 
strued to  refer  to  such  designated  portions  of  wages  payable  by  the  company  to  an 
employee  as  he  agrees  in  his  application  that  the  company  apply  for  the  purpose 
of  securing  the  benefits  of  the  benefit  fund  or  of  making  such  cash  payments  as 
it  is  necessary  for  a  member  to  make  for  said  purpose. 

Contributions  for  full  membership  are  made  each  two  weeks  on  the  company's 
regular  pay  day,  in  advance,  at  the  following  rates:  — 

First  class  wages,  less  than  $40  per  month,  10  cents  per  week. 
Second  class  wages,  $40  or  more,  but  less  than  $81  per  month,  20  cents  per  week. 
Third  class  wages,  $81  and  upwards  per  month,  30  cents  per  week. 
If  a  member's  contribution  is  omitted  from  the  pay  roll  in  error,  the  fact  that 
such  deduction  has  not  been  made  does  not  debar  him  or  his  beneficiaries  from 
benefits  to  which  they  would  otherwise  be  entitled. 


202  SOCIAL  INSURANCE.  [Feb. 

When  a  member  has  no  wages  on  the  pay  roll,  any  contribution  due  from  him 
must  be  paid  in  cash  to  the  superintendent,  otherwise  he  is  in  arrears. 

No  member  falls  in  arrears  for  contributions  while  drawing  benefits  for  disability, 
and  the  payment  of  contributions  by  the  member  is  not  required  during  any  period 
in  which  said  member  is  drawing  payments  for  disability. 

No  deduction  on  account  of  benefit  fund  is  made  from  the  pay  of  an  applicant  for 
membership,  and  no  increase  or  deduction  is  made  from  the  pay  of  an  applicant  for 
increase  of  class,  without  instructions  from  the  superintendent,  and  any  deduction 
made  to  the  contrary  is  held  to  be  in  error,  and  is  due  him  as  a  refund  if  the  applica- 
tion is  not  approved. 

When  a  member's  service  terminates  there  is  due  him  as  a  refund  any  excess 
of  contribution  he  made  above  what  is  necessary  to  adjust  his  accounts  to,  and  in- 
cluding the  last  day  of  the  week  in  which  he  leaves  the  service,  but  no  refund  is  due 
on  the  death  of  a  member. 

Any  refund  of  contributions  due  a  member  is  payable  upon  application  therefor 
by  such  person,  if  made  within  twelve  months  after  termination  of  membership, 
and  is  made,  by  warrant  or  otherwise,  in  conformity  with  the  financial  methods  of 
the  society  upon  surrender  of  membership  certificate. 

Wherever  used  in  these  regulations  the  word  "disability"  is  held  to  mean  (a) 
physical  inability  to  work  by  reason  of  sickness,  or  (b)  physical  inability  to  work 
by  reason  of  accidental  injuries.  The  word  "disabled"  applies  to  members  thus 
physically  unable  to  work;  the  decision  as  to  when  members  are  disabled  and  when 
they  are  able  to  work  rests  with  the  medical  officers.  The  decision  as  to  whether 
any  disability  shall  be  considered  a  relapse  or  an  original  disability  rests  with  the 
medical  officers.  When  a  disability  is  classed  as  a  relapse  the  time  of  such  dis- 
ability is  considered  a  part  of  the  original  disability  in  determining  the  length  of 
time  for  which  benefits  are  payable.  In  considering  the  question  of  disability,  sub- 
jective symptoms  or  alleged  feelings  are  given  due  weight,  but  these  in  themselves, 
unsupported  by  objective  and  discoverable  symptoms,  do  not  entitle  a  member  to 
be  considered  disabled. 

When  a  member  becomes  disabled  he  notifies  the  superintendent  immediately, 
or  causes  him  to  be  notified.  In  reporting  disability  the  member  also  gives  his 
house  address.  If  he  fails  to  give  notice  until  he  recovers  he  is  not  entitled  to 
benefits  unless  he  proves  his  disability  to  the  satisfaction  of  the  superintendent, 
and  gives  satisfactory  reasons  for  failure  to  give  notice.  If  he  gives  notice  during 
his  disability,  but  delays  in  so  doing,  he  is  not  considered  disabled  before  the  day 
on  which  notice  is  given  unless  he  proves  his  disability  before  that  day  to  the  satis- 
faction of  the  superintendent,  and  gives  satisfactory  reasons  for  delay  in  giving 
notice.  When  a  member  becomes  disabled  it  is  his  duty,  unless  incapacitated 
therefrom  by  his  disability,  to  report  immediately  in  person  to  the  medical  ex- 
aminer at  his  office  during  office  hours.  It  is  the  duty  of  a  disabled  member,  not 
confined  to  the  house  by  disability,  to  report  at  the  medical  examiner's  office  from 
time  to  time  as  requested,  and  to  keep  any  other  appointment  made  by  that  officer 
or  the  superintendent.  Members  who  avoid  the  medical  officers,  or  neglect  to 
report  or  keep  appointments  as  herein  pro vided,  are  not  entitled  to  benefits. 

If  a  member  who  has  been  notified  by  the  medical  officer  as  able  to  work  is  not 
able  to  on  the  day  set,  he  immediately  communicates  with  the  medical  officer,  re- 
porting to  him  in  person  if  possible;  otherwise  he  is  not  considered  disabled  on  or 
after  the  day  set  for  his  return  to  work. 

When  a  member  becomes  disabled  during  definite  suspension,  furlough  or  leave 
of  absence,  and  while  away  from  his  usual  place  of  residence  when  on  duty,  he  is 
not  entitled  to  benefits  unless  he  reports  his  disability  immediately  as  required  by 
the  regulations,  and  proves  his  disability  while  absent  to  the  satisfaction  of  the 
superintendent.  In  case  a  disabled  member  wishes  to  absent  himself  for  any  length 
of  time  from  his  usual  place  of  residence  when  on  duty  he  first  sees  the  superintend- 
ent and  medical  director,  and  obtains  approval  of  absence  for  a  specified  time. 


I 


1917.]  HOUSE  —  No.  1850.  203 

He  furnishes  to  the  medical  director  a  satisfactory  certificate,  informs  him  of  his 
address  and  reports  to  him  immediately  on  his  return.  If  such  disabled  member 
goes  away  and  remains  away  without  previously  consulting  the  medical  director 
or  superintendent,  and  obtains  approval  of  absence  for  a  specified  time,  or  over- 
stays his  leave,  he  is  not  entitled  to  benefits  for  any  time  of  absence  unless  he  proves 
his  disability  while  absent  to  the  satisfaction  of  the  superintendent,  and  gives  sat- 
isfactory reasons  for  failure  to  consult  the  medical  director  before  leaving. 

A  member  is  not  entitled  to  receive  benefits  continuously  for  more  than  twenty- 
seven  weeks  for  any  disability. 

In  case  of,  and  during  continuance  of,  disability  after  payment  of  twenty-seven 
weeks'  benefits,  a  member  retains  title  to  death  benefit  for  one  year  from  date  of 
expiration  of  limit  of  disability  benefits,  provided  he  keeps  the  superintendent  in- 
formed of  his  address,  and  furnishes  him  monthly  satisfactory  evidence  of  con- 
tinued disability;  otherwise  his  membership  terminates. 

After  a  member  has  sufficiently  recovered  from  disability,  for  which  twenty- 
seven  weeks'  benefits  have  been  paid,  to  resume  work,  he  is  not  restored  to  mem- 
bership, nor  is  he  eligible  for  benefits,  until  his  complete  recovery  is  assured  by 
thorough  physical  examination  by  the  medical  examiner,  and  his  membership 
formally  restored  in  writing  by  the  superintendent. 

A  member  who  has  drawn  twenty-seven  weeks'  continuous  benefits  is  not  re- 
quired to  make  full  contribution  until  restored  to  full  membership.  A  member  is 
not  entitled  to  benefits  for  disability  from  any  cause  while  still  disabled  from  a 
preceding  cause.  If  a  disabled  member  declines  to  accept  benefits  he  does  not 
make  contributions  nor  retain  title  to  benefits.  If  such  member  afterwards  accepts 
the  benefits  to  which  he  is  entitled,  a  proper  adjustment  of  contribution  is  made. 

In  any  case  of  grave  injury  or  chronic  sickness,  where  the  member  desires  to 
accept  a  lump  sum  in  lieu  of  the  benefits  which  might  become  due  to  him  or  his 
account,  and  in  full  of  all  obligations  of  the  society  arising  from  his  membership, 
the  superintendent  has  authority  to  make  full  and  final  settlement  with  such  mem- 
ber on  such  terms  as  may  be  agreed  upon  in  writing.  All  such  settlements  are 
reported  to  the  committee  at  their  next  meeting. 

In  computing  benefits  the  term  of  disability  is  considered  as  beginning  upon  the 
first  day  upon  which  no  wages  or  less  than  one  day's  wages  are  paid  because  of 
disability,  and  this  day  is  called  "first  day  wages  not  paid." 

Benefits  are  paid  in  conformity  with  the  financial  methods  of  the  society  and  on 
warrants  drawn  by  the  superintendent  (or  in  his  absence  by  such  otKer  person  as 
is  authorized  by  the  general  manager),  upon  his  receiving  satisfactory  certificates 
respecting  the  claim  required  of  him. 

Benefits  on  account  of  disability  are  payable  each  two  weeks  or  oftener,  on  a 
day  designated  by  the  superintendent. 

Benefits  payable  on  account  of  the  disability  of  a  member  are  payable  only  to 
such  member  or,  in  accordance  with  his  written  order  when  approved  by  the  super- 
intendent, to  his  legal  representative. 

When,  in  the  opinion  of  the  medical  director,  a  member  is  mentally  incompetent, 
disability  benefits  due  him  are,  at  the  discretion  of  the  superintendent,  paid  to 
his  wife  or  to  some  member  of  his  family,  or  to  his  employing  officer,  for  the  use 
and  benefit  of  the  member,  and  such  payment  is  a  bar  to  any  subsequent  claim  on 
the  part  of  the  member  or  his  legal  representative  for  the  amounts  so  paid. 

Benefits  are  not  payable  for  disability  directly  or  indirectly  or  partly  due  to 
intoxication  or  to  use  of  alcoholic  liquors  as  a  beverage,  or  to  immoderate  use  of 
stimulants  or  narcotics,  or  to  unlawful  acts  or  immoralities  or  venereal  disease, 
however  contracted,  or  to  the  results  thereof,  or  to  orchitis,  except  when  directly 
due  to  and  in  connection  with  an  attack  of  mumps,  or  to  epididymitis,  stricture, 
urethritis,  glandular  swelling  or  abscess  in  the  groin,  however  caused,  or  to  fighting, 
unless  in  self-defence  against  unprovoked  assault,  or  to  any  other  encounter,  such 
as  wrestling,  fooling,  shuffling  and  the  like,  or  to  injury  received  in  any  brawl  or 


204  SOCIAL  INSURANCE.  [Feb. 

any  liquor  saloon,  gambling  house  or  any  disreputable  resort.  During  disability 
called  under  this  regulation,  members  who  keep  the  superintendent  informed  of 
their  addresses  and  furnish  him  monthly  satisfactory  evidence  of  continued  dis- 
ability retain  title  to  death  benefit  for  a  period  of  thirty-nine  weeks;  otherwise, 
and  after  such  period,  their  membership  terminates. 

Benefits  are  not  due  on  account  of  disability  beginning  or  death  occurring  while 
a  member  is  in  arrears. 

Members  are  not  entitled  to  benefits  if  they  decline  to  permit  the  medical  officer 
to  make  or  to  have  made  by  any  other  physician  such  examination  as  he  may  deem 
necessary  to  ascertain  their  condition  when  disability  is  claimed. 

Disabled  members  must  take  proper  care  of  themselves  and  have  suitable  medical 
treatment;  benefits  are  discontinued  if  members  refuse  or  neglect  to  comply  with 
the  recommendations  of  the  officers  of  the  benefit  society  as  to  proper  care  and 
treatment. 

Unless  a  member  previously  arranges  with  the  superintendent  for  absence  in 
foreign  lands,  benefits  will  not  be  paid  on  account  of  disability  or  death  occurring 
at  any  place  outside  of  the  continental  United  States,  except,  however,  that  the 
provisions  of  this  section  do  not  apply  in  cases  of  death  occurring  in  the  Province 
of  Ontario,  Dominion  of  Canada. 

Any  claims  for  disability  to  be  valid  must  be  made  within  thirty  days  from  the 
time  when  such  benefits  accrue,  and  any  claim  for  death  benefit  to  be  valid  must  be 
made  within  six  months  from  death  of  member.  ' 

A  person  entitled  to  benefits  for  disability  beginning  before  and  continuing  after 
termination  of  service  is  not  entitled  to  benefits  on  account  of  disability  beginning 
or  death  occurring  after  such  termination,  unless  directly  due  to  the  sickness  or 
injury  occurring  during  the  disability,  which  existed  before  and  at  the  time  of  such 
termination  of  service. 

The  following  benefits  are  paid  to  members  or  beneficiaries  entitled  thereto:  — 

Payment  is  made  for  each  day,  not  including  Sunday,  of  disability  classed  as 
due  to  sickness  or  accident,  except  as  restricted  by  the  provisions  of  this  section. 
No  benefits  are  paid  for  any  disabilities  classed  as  due  to  sickness  which  does  not 
incapacitate  the  member  for  a  period  of  at  least  seven  days,  but  if  the  incapacity 
extends  beyond  a  period  of  fourteen  days  payment  is  made  from  the  first  day  of 
such  disability,  but  for  a  period  not  longer  than  twenty-seven  weeks,  at  the  follow- 
ing rates: — 

To  a  member  of  the  first  class,  .  .  .  .  .  $1.00  per  working  day. 
To  a  member  of  the  second  class,  .  .  .  .  .  $1.50  per  working  day. 
To  a  member  of  the  third  class,  .....  $1.75  per  working  day. 

No  member  has  authority  to  contract  any  bills  against  the  society,  and  nothing 
herein  is  held  to  mean  or  imply  that  the  society  is  responsible  for  the  payment  of 
such  bills  as  a  member  may  contract  or  his  surgeon  may  charge. 

To  establish  a  claim  for  benefits  due  to  accident  disability  the  accident  must  be 
reported  immediately  upon  its  occurrence,  and  there  must  be  external,  positive  and 
visible  evidence  of  physical  injury  by  accident  sufficient  to  cause  immediate  dis- 
ability, and  whenever  possible  the  injured  party  must  call  at  once,  or  as  soon  as 
practicable  thereafter,  at  the  medical  examiner's  office  for  examination. 

In  case  of  alleged  sprain,  strain,  wrench  and  the  like,  where  external  physical 
proof  of  disabling  injury  is  lacking,  the  member  must  furnish  substantial  history, 
satisfactory  to  the  medical  officer,  of  violence  accidentally  inflicted  sufficient  and 
liable  to  cause  disabling  injury;  otherwise  benefits  will  not  be  allowed. 

When  a  member  meets  with  any  accident  from  which  disability  may  result,  and 
on  account  of  which  he  wishes  to  reserve  the  right  to  claim  benefits,  he  reports  the 
accident  to  the  superintendent  immediately  upon  its  occurrence,  and  also  reports 
in  person  to  the  medical  officer  when  possible. 


1917.]  HOUSE  —  No.  1850.  205 

A  member  who  has  drawn  benefits  continuously  for  a  period  of  twenty-seven 
weeks,  and  remains  disabled,  retains  title  to  his  death  benefit  for  one  year  from  the 
date  of  expiration  of  limit  of  benefits  without  making  contributions  during  the 
continuance  of  that  disability,  provided  he  keeps  the  superintendent  informed  of 
his  address  and  furnishes  him  monthly  satisfactory  evidence  of  continued  dis- 
ability; otherwise  his  benefit  terminates.  If  such  member  resumes  work  for  the 
pompany  he  does  not  resume  contributions  nor  titles  to  benefit  until  formally 
,iccepted  by  the  superintendent  after  physical  examination  by  and  approval  of 
the  medical  director.  » 

No  member  is  entitled  to  benefits  for  sickness,  nor  are  death  benefits  payable  for 
death  resulting  from  sickness,  unless  said  disability  begins  not  less  than  fifteen  days 
after  date  of  formal  acceptance  as  a  member. 

To  establish  a  claim  for  sick  benefits  there  must  be  positive  evidence  of  acute  or 
constitutional  disease  sufficient  to  cause  disability. 

No  member  who  has  received  sick  benefit  for  a  period  of  twenty-seven  weeks 
continuously  is  entitled  to  benefits  for  the  same  disease  until  after  the  expiration 
of  six  months  from  the  time  his  recovery,  or  return  to  work,  is  reported. 

Payments  in  accordance  with  the  conditions  prescribed  in  the  regulations  upon 
the  death  of  a  member  are  as  follows:  — 

For  members  of  the  first  class,  .     .    .          .          .          .          .          .          .          ,     $150 

For  members  of  the  second  class,     .          .          .          .          .          .          .          .       200 

For  members  of  the  third  class, .          .       250 

Death  benefit  is  not  payable  in  case  of  death  due  directly  or  indirectly  to  unlawful 
acts  of  the  deceased  member,  or  at  the  hands  of  justice. 

Death  benefits,  together  with  any  unpaid  disability  benefits,  are  payable  to  the 
beneficiary  of  a  deceased  member  upon  proof  of  claim. 

A  part  of  the  death  benefit  is,  at  the  discretion  of  the  superintendent,  paid  before 
final  settlement  to  meet  funeral  or  other  urgent  expenses  incident  to  the  death  of  a 
member. 

In  any  controversy,  claim,  demand,  suit  at  law,  or  other  proceeding  between  any 
member,  his  beneficiary  or  legal  representative  and  the  company  or  the  benefit 
society,  the  certificate  of  the  superintendent  as  to  any  facts  appearing  in  the  records 
of  the  benefit  society  or  of  the  company,  or  his  statement  that  any  writing  is  a 
copy  taken  from  said  records,  or  of  any  instrument  on  file  in  office  of  said  society, 
or  with  the  company,  or  that  any  action  has  or  has  not  been  taken  by  the  committee 
or  by  the  company,  is  prim  a  facie  evidence  of  the  existence  of  such  records  and 
their  accuracy,  and  of  all  the  facts  therein  stated. 

All  questions  or  controversies  of  whatsoever  character  arising  in  any  manner, 
or  between  any  party  or  persons  in  connection  with  the  benefit  society  or  the 
operation  thereof,  as  to  any  claim  for  benefits  preferred  by  any  member  or  his  legal 
representative  or  his  beneficiary  or  any  other  person,  or  as  to  the  construction  of 
language  or  meaning  of  the  regulations,  or  as  to  writing,  decision,  instruction  or 
acts  in  connection  with  the  operation  of  the  society,  is  submitted  to  the  determina- 
tion of  the  superintendent,  whose  decision  is  final  and  conclusive  thereon,  unless  an 
appeal  is  taken  to  the  committee  within  thirty  days  after  notice  of  such  decision 
given  to  the  parties  interested. 

When  an  appeal  is  taken  to  the  committee  it  is  heard  by  said  committee  at  their 
next  meeting,  or  at  such  future  meeting  or  time  as  they  designate,  provided 
twenty-four  hours'  notice  of  said  meeting  be  given  to  the  appellant,  and  is  deter- 
mined by  a  vote  of  the  majority  of  a  quorum,  or  of  any  other  number  not  less  than 
a  quorum,  of  the  members  present  at  such  meeting,  and  the  decision  arrived  at 
thereon  by  the  committee  is  final  and  conclusive  upon  all  parties  without  excep- 
tion or  appeal. 

The  company  may  at  any  time  elect  to  withdraw  its  support  of  the  society  as 


206  SOCIAL  INSURANCE.  [Feb. 

defined  in  these  regulations  by  a  written  notice  addressed  to  the  advisory  committee 
at  least  ninety  days  prior  to  the  date  of  such  withdrawal. 

The  existence  of  this  society  is  terminated  at  any  time  by  a  majority  vote  of  the 
advisory  committee,  and  in  that  event  the  moneys  in  the  fund  are  held  by  the 
company,  in  trust,  for  the  payment  of  outstanding  claims  and  liabilities,  and  upon 
the  completion  of  such  payments  the  money  then  remaining  in  the  fund  is  divided 
into  shares  of  uniform  amount  equal  in  number  to  the  total  weeks'  membership  of 
all  the  members  in  good  standing  on  the  date  of  termination  and  existence,  anq 
reimbursement  is  made  such  members  on  the  basia  of  one  share  for  each  week  for 
which  they  have  been  contributors  to  the  fund. 

This  following  account  of  the  administration  of  an  employees'  benefit 
association  is  of  interest  because  it  includes  a  detailed  account  of  the  ad- 
ministration of  their  pension  fund:  — 

EMPLOYEES'  BENEFIT  ASSOCIATION  IN  A  COMPANY  HAVING  PLANTS 
IN  SEVERAL  DIFFERENT  STATES. 

In  this  association  the  members  are  divided  into  two  classes:  — 

Class  A  includes  all  members  not  employed  at  the  manufacturing  plant,  mills 
or  mines,  and  all  others  not  entitled  to  benefits  under  any  workmen's  compensation 
law  or  the  company's  industrial  accident  plan. 

Members  of  this  class  are  entitled  to  claim  from  the  benefit  association  the 
benefits  provided  by  its  regulations  for  sickness,  injuries  and  death,  occurring 
whether  on  or  off  duty. 

If  any  member  of  Class  A  shall  claim,  or  be  entitled  to  claim,  under  any  work- 
men's compensation  law  or  the  company's  industrial  accident  department  plan, 
benefits  for  injury  or  death  arising  out  of  and  in  the  course  of  his  employment, 
such  members  shall  not  receive  benefits  from  the  benefit  association  on  account 
of  such  injury  or  death. 

Class  B  includes  all  members  employed  at  the  company's  plants,  twine  mills 
and  mines,  and  all  others  who  are,  or  may  hereafter  become  entitled  to  benefits  under 
any  workmen's  compensation  law  or  the  company's  industrial  accident  depart- 
ment plan. 

Members  of  Class  B  or  their  beneficiaries  shall  be  entitled  to  receive  from  the 
benefit  association,  subject  to  its  rules  and  regulations,  benefits  for  sickness  and 
for  injury  or  death  occurring  while  off  duty. 

The  contributions  from  members  of  Class  A  shall  be  If  of  the  wages  received. 
The  contributions  from  members  of  Class  B  shall  be  1^  per  cent,  of  the  wages  re- 
ceived. 

This  was  the  only  establishment  fund  investigated  where  the  contributions  were 
on  a  percentage  basis. 

This  association  also  provides  for  disability  due  to  pregnancy,  which  shall  be 
limited  to  three  months,  and  said  benefit  shall  be  paid  in  a  lump  sum,  provided  in 
all  cases,  however,  claimant  shall  have  been  a  member  of  the  benefit  association 
for  nine  months. 

In  regard  to  accident  benefit,  the  plan  is  somewhat  more  complicated,  as  follows:  — 

1.  Payment  for  each  working  day  or  part  of  working  day,  during  disability 
classed  as  due  to  accident,  for  a  period  not  longer  than  fifty-two  weeks,  shall  be 
one-half  of  member's  average  pay  on  the  basis  of  the  last  sixty  days  worked. 

Any  member  who  has  received  accident  disability  benefits  continuously  for  a 
period  of  fifty-two  weeks,  as  provided  in  section  28,  shall  be  entitled  to  no  further 
benefits  of  any  nature  whatsoever,  and  his  membership  shall  cease  unless  it  is 
continued  for  death  benefits  only,  as  provided  in  section  15.  If,  after  recovery, 
aaid  member  resumes  active  work  with  one  of  the  companies,  he  shall  be  considered 


1917.]  HOUSE  — No.  1850.  207 

by  the  association  as  a  new  employee,  and  shall  be  subject  to  all  conditions  of  sec- 
tion 13. 

Accident  benefits  provided  in  this  section  are  payable  to  the  members  of  Class  A 
for  accidents  occurring  either  on  or  off  duty,  provided,  if  any  member  of  Class  A 
shall  claim,  or  be  entitled  to  claim,  under  any  workmen's  compensation  law  or  the 
company's  industrial  accident  department  plan,  benefits  for  injury  resulting  from 
an  accident  arising  out  of  and  in  the  course  of  his  employment,  such  member  shall 
not  be  entitled  to  receive  from  the  benefit  association  any  benefits  on  account  of 
such  injury. 

To  members  of  Class  B  accident  benefits  will  be  paid  only  for  accidents  occurring 
while  off  duty  and  accidents  not  arising  out  of  and  in  the  course  of  the  employ- 
ment. 

Note.  —  Benefits  for  accidents  to  members  of  Class  B,  occurring  while  on  duty 
and  in  the  course  of  their  employment,  are  provided  by  workmen's  compensation 
laws  or  the  company's  industrial  accident  department  plan. 

2.  To  establish  a  claim  for  accident  benefits,  the  accident  must  be  reported 
immediately  upon  its  occurrence,  and  there  must  be  external,  positive  and  visible 
evidence  of  physical  injury  by  accident  sufficient  to  cause  immediate  disability. 
In  cases  of  alleged  sprain,  strain,  wrench,  and  the  like,  where  physical  proof  of 
disability  is  lacking,  a  member  must  furnish  substantial  history,  satisfactory  to 
the  superintendent,  of  violence  accidentally  inflicted  sufficient  and  liable  to  cause 
disabling  injury;  otherwise  accident  benefits  will  not  be  allowed. 

Special  provisions  are  made  for  serious  accidents,  such  as  loss  of  limbs,  eyes,  etc. 

(a)  Feet  and  Hands.  —  If  a  member  receives  accidental  injuries  producing  the 
immediate  severing  of,  or  necessitating,  in  the  opinion  of  a  medical  examiner  of 
the  association,  the  amputation  of,  a  hand  or  foot  at  or  above  the  wrist  or  ankle, 
he  shall  receive  a  total  amount  equal  to  one  year's  average  wages. 

In  case  of  loss  of  both  hands  or  both  feet,  or  of  one  hand  and  one  foot,  he  shall 
receive  twice  the  above  benefits,  or  a  total  amount  equivalent  to  two  years'  average 


(6)  Eyes.  —  If  a  member  receives  accidental  injuries  resulting  in  the  total  and 
irrevocable  loss  of  sight  of  one  eye  he  shall  receive  a  total  amount  equal  to  one-half 
his  average  yearly  wage. 

For  the  total  and  irrevocable  loss  of  the  sight  of  both  eyes  he  shall  receive  the 
total  amount  of  two  years'  average  wages. 

Special  benefits  provided  in  this  section  are  payable  to  the  members  of  Class  A 
for  accidents  occurring  either  on  or  off  duty,  provided,  if  any  member  of  Class  A 
shall  claim,  or  be  entitled  to  claim,  under  any  workmen's  compensation  law  or  the 
company's  industrial  accident  department  plan,  benefits  for  injury  resulting  from 
an  accident  arising  out  of  and  in  the  course  of  his  employment,  said  member  shall 
not  be  entitled  to  receive  from  the  benefit  association  any  benefits  on  account  of 
such  injury. 

Note.  —  Benefits  for  accidents  to  members  of  Class  B,  occurring  while  on  duty 
and  in  the  course  of  their  employment,  are  provided  by  workmen's  compensation 
laws  or  the  company's  industrial  accident  department  plan. 

In  case  of  any  grave  injury  or  chronic  sickness,  where  the  member  desires  to  accept 
a  lump  sum  in  lieu  of  the  disability  benefits  which  might  become  due  to  him  or  on 
his  account,  and  in  full  of  all  obligations  of  the  benefit  association  arising  from  his 
membership,  the  superintendent  shall  have  authority  to  make  full  and  final  settle- 
ment with  such  member  on  such  terms  as  may  be  agreed  upon  in  writing.  All  such 
settlements  shall  be  reported  to  the  board  of  trustees  at  its  next  meeting. 

This  association  maintains  also  pension  systems  which  were  established  by  the 
directors  of  the  company  as  an  evidence  of  their  appreciation  of  the  fidelity,  effi- 
ciency and  loyalty  of  the  employees. 

The  following  is  a  brief  summary  of  the  administration,  eligibility,  pension 
allowances  and  conditions. 


208  SOCIAL  INSURANCE.  [Feb. 

The  administration  of  the  pension  fund  shall  be  in  charge  of  a  pension  board 
consisting  of  five  members,  who  shall  all  be  officers  or  employees  of  this  company 
or  of  affiliated  or  subsidiary  companies,  and  shall  be  appointed  annually  by  the 
board  of  directors  of  this  company  to  serve  for  one  year  and  until  their  successors 
are  appointed  and  shall  qualify. 

The  pension  board  shall  elect  a  chairman  and  a  secretary  from  among  its  members, 
and  the  treasurer  of  this  company  shall  be  ex  officio  treasurer  of  the  fund.  The 
board  may  make  and  enforce  rules  for  the  efficient  administration  of  the  pension 
fund,  subject  to  the  approval  of  the  board  of  directors.  The  pension  board  shall 
control  the  payment  of  pension  allowances  under  the  rules  hereinafter  stated. 

A  majority  of  the  pension  board  shall  constitute  a  quorum  for  all  purposes. 

The  members  of  the  board  shall  be  so  chosen  that  the  principal  departments  of 
the  business  shall  have  representation. 

The  treasurer  of  the  company  shall  be  the  custodian  and  treasurer  of  the  fund, 
and  additions  shall  be  made  to  said  fund  yearly,  or  from  time  to  time,  according  to 
the  aggregate  pension  allowances  and  the  amount  available  in  the  pension  fund 
for  payment  of  the  same.  Should  the  aggregate  pension  allowances  exceed  in  any 
one  year  such  sum  as  the  board  of  directors  may  have  designated  as  available  for 
this  purpose,  then,  unless  the  board  of  directors  increases  the  yearly  amount  usable 
for  pensions,  a  new  rate  shall  be  established  proportionately  reducing  all  allowances. 

Payments  from  this  fund  shall  only  be  made  in  accordance  with  and  by  direction 
of  the  pension  board. 

As  to  eligibility ,  the  following  is  noted :  — • 

The  pension  board  may  authorize  the  payment  of  a  pension  to  any  retired 
employee  on  the  following  basis:  — 

(a)  All  employees  of  this  company,  and  of  subsidiary  and  affiliated  companies 
engaged  in  any  capacity,  are  eligible  to  pensions  as  hereinafter  stated. 

(6)  All  male  employees  who  shall  have  reached  the  age  of  sixty-five  years,  and 
have  been  twenty  or  more  years  in  the  service,  may,  at  their  own  request,  or  at  the 
discretion  of  the  pension  board,  be  retired  from  active  service  and  become  eligible 
to  a  pension. 

(c)  All  male  employees  who  have  been  twenty  or  more  years  in  the  service  shall 
be  retired  at  the  age  of  seventy  years  on  the  first  day  of  the  calendar  month  follow- 
ing that  in  which  they  shall  have  attained  said  age,  unless  at  the  discretion  of  the 
pension  board  some  later  date  be  fixed  for  such  retirement.     Persons  occupying 
executive  positions  are  exempt  from  the  maximum  age  limit. 

(d)  All  female  employees  who  shall  have  reached  the  age  of  fifty  years  and  have 
been  twenty  or  more  years  in  the  service,  may,  at  their  own  request,  or  at  the 
discretion  of  the  pension  board,  be  retired  from  active  service  and  become  eligible 
to  a  pension. 

(e)  All  female  employees  shall  be  retired  at  the  age  of  sixty  years  on  the  first 
day  of  the  calendar  month  following  that  in  which  they  shall  have  attained  said 
age,  unless  at  the  discretion  of  the  pension  board  a  later  date  shall  be  fixed  for 
such  retirement.     Persons  occupying   executive  positions   are  exempt  from   the 
maximum  age  limit. 

A  temporary  lay-off  on  account  of  illness  or  of  reduction  of  force  is  not  to  be 
considered  as  a  break  in  the  continuity  of  service,  but  when  such  absence  exceeds 
six  consecutive  months  it  shall  be  deducted  in  computing  the  length  of  active 
service. 

If  a  person,  after  leaving  the  service  for  more  than  two  years,  shall  be  re-employed 
he  shall  be  considered,  in  his  relation  to  the  pension  system,  as  a  new  employee. 

The  sums  which  'the  board  of  pensions  may  authorize  to  be  paid  monthly  to 
employees  retired  at  the  age  limit  shall  be  as  follows:  for  each  year  of  active  service 
an  allowance  of  1  per  cent,  of  the  average  annual  pay  during  the  ten  years  next 
preceding  retirement;  but  no  pension  shall  exceed  $100  per  month  or  be  less  than 
$21  per  month. 


1917.]  HOUSE  —  No.  1850.  209 

(a)  Pension  allowances  shall  be  paid  on  the  first  of  each  month  from  the  date  of 
retirement  until  the  death  of  employee. 

(ft)  At  the  discretion  of  the  pension  board  these  allowances  may  be  continued 
to  widows  and  orphans  of  a  pensioner  for  a  limited  period. 

(c)  Pension  allowances  shall  be  non-assignable,  and  an  attempted  transfer  or 
pledge  of  the  same  shall  not  be  recognized  by  the  pension  board,  and  may  in  its 
discretion  work  a  forfeiture  thereof. 

(d)  Pension  allowances  may  be  suspended  or  terminated  by  the  pension  board 
in  cases  of  gross  misconduct  or  of  any  violation  of  the  rules,  or,  at  its  discretion, 
may  be  paid  to  some  member  of  the  family. 

(e)  The  acceptance  of  the  pension  shall  not  debar  any  retired  employee  from 
engaging  in  any  other  business  which  in  the  judgment  of  the  pension  board  is  not 
prejudicial  to  the  interests  of  this  company  or  of  any  affiliated  or  subsidiary  com- 
pany, but  he  cannot  re-enter  service. 

(/)  No  payments  for  pensions  shall  be  approved  by  the  pension  board  until 
payments  from  any  relief  fund  operated  by  this  company,  or  any  affiliated  or 
subsidiary  company,  shall  cease. 

The  amount  of  pension  granted  on  account  of  advanced  age  will  depend,  as 
before  stated,  on  two  conditions,  —  the  number  of  years  the  person  has  served 
the  company,  and  the  amount  of  his  average  wages  per  year  for  the  ten  years  next 
preceding  retirement.  Thus,  for  illustration,  if  the  average  pay  per  year  for  the 
last  ten  years  of  active  service  equals  $600,  and  if  the  service  has  been  continuous 
for  twenty-five  years,  the  pension  would  be  25  per  cent,  of  $600,  or  $150  per  year, 
or  $12.50  per  month.  Since  the  minimum  pension  has  been  fixed  at  $21  per  month, 
then  to  this  regular  percentage  $8.50  would  be  added,  making  the  minimum  sum 
of  $21. 

In  special  cases,  where  the  term  of  service  is  less  than  twenty  years,  the  pension 
and  the  amount  of  same,  if  any,  will  be  determined  solely  at  the  discretion  of  the 
board  of  pensions. 

In  special  cases,  where  the  term  of  service  is  twenty  years  or  less,  and  the  employee 
is  obliged  to  discontinue  work  before  arriving  at  the  age  of  sixty-five  years  on  account 
of  total  disability,  the  pension  board  may,  at  its  discretion,  grant  a  pension. 

In  special  cases,  where  the  employee  occupies  an  executive,  or  a  semi-executive 
position,  and  where  on  account  of  advancing  years  his  retirement  is  advisable,  the 
pension  board  may,  at  its  discretion,  grant  a  pension,  provided  the  employee  has 
been  twenty  or  more  years  in  the  service,  and  provided,  further,  that  the  employee's 
superior  officer  approves  of  the  retirement  on  a  pension.  In  determining  the 
amount  of  the  pension  to  be  paid,  the  pension  board  may,  at  its  discretion,  add  to 
the  actual  length  of  service  the  number  of  years  represented  by  the  difference  be- 
tween the  age  of  the  employee  at  the  time  the  application  is  made  and  sixty-five 
years. 

Department  heads  are  expected  to  keep  informed  of  the  whereabouts  and  physi- 
cal condition  of  former  employees  receiving  pensions,  and  are  required  to  advise 
the  secretary  of  the  board  of  pensions  of  the  death  of  the  pensioner  and  of  any 
other  circumstances  which  would  affect  his  monthly  payment. 

A  physical  examination  by  a  company  surgeon,  or,  in  case  of  female  employees, 
by  a  surgeon  approved  by  the  board  of  pensions,  will  be  required  of  employees  who 
wish  to  be  retired  on  a  pension  allowance  because  of  incapacity. 

An  employee  wishing  to  apply  for  a  pension  should  first  take  up  the  subject  with 
the  superintendent  at  the  works  where  he  is  employed,  or  with  the  head  of  the  de- 
partment in  which  he  is  serving,  or  with  a  member  of  the  pension  board.  A  form 
will  then  be  furnished  which  must  be  filled  out  and  signed,  giving  the  necessary 
information  regarding  the  applicant's  age,  length  of  service  and  wages.  This 
formal  application  must  be  signed  by  the  work's  superintendent,  or  head  of  de- 
partment employing  applicant,  and  then  sent  to  the  secretary  of  the  pension  board 
at  his  office. 


210  SOCIAL  INSURANCE.  [Feb. 

Neither  the  establishment  of  this  system  nor  the  granting  of  a  pension,  nor  any 
other  action  now  or  hereafter  taken  by  the  pension  board  or  by  the  officers  of  this 
company,  shall  be  held  or  construed  as  creating  a  contract,  or  giving  to  any  officer, 
agent  or  employee  a  right  to  be  retained  in  the  service,  or  any  right  to  any  pension 
allowance,  and  the  company  expressly  reserves,  unaffected  hereby,  its  right  to 
discharge  without  liability,  other  than  for  salary  or  wages  due  or  unpaid,  any  em- 
ployee, whenever  the  interests  of  the  company  in  its  judgment  may  so  require. 

The  Flint  Vehicle  Factories  Mutual  Benefit  Association  is  of  special 
interest  because  it  is  the  only  one,  so  far  as  I  have  been  able  to  find  out, 
that  is  maintained  and  managed  entirely  by  the  employees. 

The  employers  contribute  nothing  and  have  no  word  in  the  management. 

In  addition,  the  association  manages  a  club  with  a  comfortable  house, 
with  sleeping  quarters,  gymnasium,  reading  and  lounging  rooms,  etc.  The 
dues  are  merely  nominal,  but  one  must  be  a  member  of  the  association 
to  be  eligible  for  membership. 

The  following  is  a  copy  of  the  Constitution  and  By-Laws  of  the  Flint 
Vehicle  Factories  Mutual  Benefit  Association:  — 

IMPORTANT BEAD   THIS   AGREEMENT.       ' 

You  will  be  responsible  for  notification  to  the  secretary  in  case  of  sickness  or 
accident:  fill  out  the  enclosed  "Notice  of  Disability,"  signed  by  your  foreman,  and 
mail  to  the  secretary  within  one  week. 

Be  sure  and  notify  the  secretary,  at  the  Vehicle  Workers'  Club  Rooms,  128  East 
Kearsley  Street,  Bell  Phone  313,  and  give  residence,  street  and  number,  also  what 
factory  employed.  (See  Article  V,  section  4.) 

Dues  are  to  be  paid  each  two  weeks  in  advance.  If  they  are  not  deducted  on  the 
regular  pay  days  it  is  your  duty  to  pay  them  to  the  secretary.  If  your  dues  are 
not  paid  you  will  not  receive  benefits  in  case  of  disability. 


CONSTITUTION  AND  BY-LAWS. 
,  CONSTITUTION. 

Article  I. 

SECTION  1.  This  association  shall  be  known  as  the  Flint  Vehicle  Factories' 
Mutual  Benefit  Association. 

Article  II. 

SECTION  1.  The  object  of  this  association  shall  be  the  relief  of  its  members  in 
case  of  sickness,  injury  or  disability  which  may  unfit  them  for  their  daily  labor, 
and  to  provide  funeral  benefits  in  case  of  death. 

Article  III. 

SECTION  1.  The  regular  meeting  of  this  association  shall  be  held  annually  on 
the  second  Tuesday  in  January. 

SECTION  2.  Twenty-five  members  shall  constitute  a  quorum  for  the  transaction 
of  business. 

Article  IV. 

SECTION  1.  The  board  of  trustees  of  this  association  shall  be  constituted  as 
follows:  One  trustee  from  each  factory:  J.  B.  Armstrong  Manufacturing  Com- 
pany, Buick  Motor  Company,  Nos.  1,  3,  4,  5,  6,  7,  9,  10,  11,  12,  15,  16,  17, '18; 


1917.]  HOUSE  —  No.  1850.  211 

Champion  Ignition  Company,  Chevrolet  Motor  Car  Company,  Dort  Motor  Car 
Company,  Durant-Dort  Carriage  Company,  Flint  Varnish  Works;  Greissell  Bread 
Company;  Imperial  Wheel  Company;  Mason  Motor  Company;  Michigan  Motor 
Castings  Company;  Marvel  Carbureter  Company;  W.  A.  Paterson  Company, 
Nos.  1,  3;  W.  F.  Stewart  Company;  Walker- Weiss  Axle  Company;  Weston- 
Mott  Company,  Nos.  1,  4,  5;  and  one  trustee  from  each  factory  that  may  hereafter 
become  connected  with  the  association,  to  be  known  hereafter  as  the  "Associated 
Factories."  The  present  board  of  trustees  shall  hold  office  for  the  term  they  have 
been  elected,  or  until  their  successors  have  been  elected.  At  the  annual  meeting 
of  the  association  the  required  number  of  trustees  shall  be  elected  by  ballot  to 
serve  for  two  years,  to  fill  all  vacancies  on  the  board  of  trustees.  Each  trustee  shall 
be  an  employee  of  the  factory  he  represents;  also  a  member  of  this  association. 

SECTION  2.  The  board  of  trustees  shall,  at  the  first  meeting  after  their  election 
in  each  year,  elect  the  officers  of  the  association,  consisting  of  a  president,  a  vice- 
president,  a  secretary  and  a  treasurer,  each  of  whom  shall  be  a  trustee  of  the  asso- 
ciation, except  the  secretary,  who  may  or  may  not  be  a  trustee.  Said  officers  shall 
hold  their  office  for  one  year,  or  until  their  successors  are  duly  elected  and  qualified, 
except  the  secretary  and  treasurer,  who  shall  hold  their  offices  until  March  1  of 
that  year. 

SECTION  3.  The  board  of  trustees  shall  have  the  management  and  control  of 
the  affairs  and  business  of  the  association,  subject,  however,  to  the  limitations 
contained  in  these  By-Laws.  Five  members  of  the  board  of  trustees  shall  at  all 
times  be  necessary  to  constitute  a  quorum  for  the  transaction  of  business. 

SECTION  4.  The  regular  meetings  of  the  board  of  trustees  shall  be  held  at  least 
once  each  month,  the  time  to  be  fixed  by  said  board. 

SECTION  5.  Upon  the  retirement  of  any  officer  of  the  association  the  board  shall 
elect  his  successor.  Any  vacancy  occurring  in  the  board  of  trustees  shall  be  filled 
by  appointment  by  the  board,  the  appointee  to  serve  until  his  successor  shall  have 
been  chosen  at  any  regular  or  special  meeting  of  the  association. 


BY-LAWS. 

» 

Article  I. 

SECTION  1.  The  president  shall  preside  at  all  meetings,  and  shall  call  special 
meetings  at  the  request  of  the  majority  of  the  board  of  trustees.  He  shall  sign  all 
orders  on  the  treasurer  for  money.  He  shall,  on  the  second  Mondays  in  December 
and  June,  appoint  an  auditing  committee,  consisting  of  three  members  of  the  asso- 
ciation, whose  duty  it  shall  be  to  audit  the  books  of  the  secretary  and  treasurer, 
and  make  its  report  at  the  next  regular  meeting  of  the  board  of  trustees.  The 
president  shall  enforce  all  rules  of  the  association  and  perform  such  other  duties  as 
shall  be  required. 

SECTION  2.  The  vice-president  shall  perform  the  duties  of  the  president  in  the 
absence  of  the  latter. 

SECTION  3.  The  secretary  shall  keep  and  preserve  all  records,  receive  and  deliver 
to  the  treasurer  all  moneys  due  the  association,  take  a  receipt  therefor,  issue  notices 
of  the  meetings,  make  a  report  of  each  regular  meeting  of  the  association,  and 
perform  such  other  duties  as  the  office  may  require.  He  shall  give  a  bond  of  $1,000, 
and  shall  receive  for  his  services  a  salary  as  determined  by  the  board  of  trustees. 
At  the  expiration  of  his  term  of  office  he  shall  deliver  to  his  successor,  books,  papers 
and  other  property  that  belong  to  the  association. 

SECTION  4.  The  treasurer  shall  receive  and  deposit  in  some  banking  institution 
to  be  selected  by  the  board  of  trustees,  all  moneys  belonging  to  the  association,  and 
shall  pay  it  out  by  check  on  orders  signed  by  the  president,  secretary  and  one 
trustee,  and  all  checks  must  be  signed  by  the  treasurer  and  countersigned  by  the 


212  SOCIAL  INSURANCE.  [Feb. 

president.  He  shall  give  a  bond  as  specified  by  the  board  of  trustees,  the  expense 
of  procuring  said  bonds  to  be  borne  by  the  association.  He  shall  receive  for  his 
services  $50  per  year.  He  shall  make  a  report  at  each  regular  meeting  of  the 
association. 

SECTION  5.  Any  member  in  good  standing  being  disabled,  and  giving  notice  to 
the  secretary  as  required  by  Article  V,  section  1,  this  association  shall  accept  the 
certificate  of  the  claimant's  attending  physician  in  regard  to  such  disability,  sub- 
ject, however,  to  the  provision  of  section  6  of  Article  I. 

SECTION  6.  No  member  shall  be  entitled  to  receive  any  benefits  on  account  of 
sickness,  unless  he  or  she  is  confined  to  the  house  on  account  of  such  sickness, 
nor  for  a  longer  period  than  ten  days  after  his  or  her  condnement  to  the  house  on 
account  of  such  sickness  ceases,  except  by  permission  of  the  claims  committee. 

SECTION  7.  It  shall  be  the  duty  of  the  secretary,  on  receiving  notice  of  disability 
of  any  member  in  good  standing,  to  call  on  such  member  at  least  once  each  week 
during  disability,  and  to  refer  all  doubtful  claims  to  the  regular  committee  for 
settlement.  If  they  think  it  necessary  they  may  employ  a  physician  to  examine 
the  claimant,  and  report  on  such  disability.  If  said  claimant  refuses  such  exam- 
ination, his  claim  against  the  association  shall  be  void. 

SECTION  8.  The  board  of  trustees  may  levy  an  assessment  on  the  members  of 
the  association  to  meet  the  contingencies  of  excessive  sickness  or  accident:  pro- 
vided, however,  that  such  assessment  shall  not  exceed  75  cents  for  Class  AA,  50  cents 
for  Class  A,  and  25  cents  for  Class  B  members,  and  that  such  assessment  shall  not 
be  levied  more  than  twice  in  one  year.  Further  assessments  may  be  levied  by  a 
two-thirds  vote  of  the  members  present  at  a  regular  or  special  meeting,  notice  of 
such  proposed  action  being  stated  in  a  call  for  said  meeting. 


Article  II. 

SECTION  1.  Any  person  in  good  health,  entering  the  services  of  any  of  the 
associated  factories  for  other  than  temporary  employment,  may  become  a  member 
of  this  association  upon  the  next  regular  pay  day  of  the  company  by  whom  he  is 
employed,  and  by  accepting  employment  and  joining  the  association  he  authorizes 
the  company  employing  him  to  deduct  from  his  pay  on  regular  pay  days  the  amount 
of  his  dues,  and  to  pay  the  same  to  the  secretary  of  the  association.  The  policy 
shall  bear  date  of  the  new  member's  application  for  membership,  and  dues  shall 
be  collected  from  said  date. 

SECTION  2.  No  member  of  the  association  shall  be  entitled  to  benefits  from 
sickness  until  he  or  she  has  been  a  member  for  twenty-one  consecutive  days  before 
such  sickness  occurs.  Any  member  will  be  entitled  to  benefits  in  case  of  accident 
occurring  after  being  a  member  for  five  consecutive  days. 

SECTION  3.  Membership  shall  cease  upon  the  suspension  or  expulsion  of  a 
member;  upon  his  ceasing  to  be  in  the  employ  of  the  associated  factories  for  ninety 
days,  or  for  his  leaving  the  city  for  more  than  thirty  days;  or  upon  his  neglecting 
to  pay  his  dues;  and  it  shall  be  the  duty  of  the  secretary  to  cause  the  name  of  the 
above  classes  to  be  erased  from  the  roll  of  membership.  Temporary  suspension 
from  work  shall  not  be  considered  as  ceasing  to  be  in  the  employ  of  the  company. 

SECTION  4.  You  will  be  responsible  for  notification  to  the  secretary.  In  case  of 
sickness  or  accident,  fill  out  the  enclosed  "Notice  of  Disability,"  and  mail  to  the 
secretary  within  one  week. 

Be  sure  and  notify  the  secretary,  at  the  Vehicle  Workers'  Club  Rooms,  128 
East  Kearsley  Street,  Bell  Phone  313,  and  give  residence,  street,  number,  also  what 
factory  employed.  (See  Article  V,  section  4.) 

Dues  are  to  be  paid  each  pay  day  in  advance.  If  they  are  not  deducted  on  the 
regular  pay  days  it  is  your  duty  to  pay  them  at  the  secretary's  office.  If  your  due* 
are  not  paid  you  will  not  receive  benefits  in  case  of  disability. 


1917.1  HOUSE  —  No.  1850.  213 


SECTI 


Article  III. 

WON  1.     The  funds  of  the  association  shall  consist  of  the  weekly  or  monthly 
dues  of  members,  assessments  and  any  special  gift  to  the  association. 

Article  IV. 

SECTION  1.  Membership  shall  be  divided  into  three  classes,  —  AA,  A  and  B 
classes,  AA  class  to  consist  of  those  whose  average  weekly  pay  is  $12  or  more;  A  class 
to  consist  of  those  whose  average  weekly  pay  is  $7  or  more;  B  class,  of  those  whose 
average  weekly  pay  is  less  than  $7.  Members  whose  average  weekly  pay  is  $12  or 
more  may  take  either  the  AA  or  A  class,  whichever  they  desire. 

SECTION  2.  The  dues  in  the  AA  class  shall  be  15  cents  per  week;  those  in  A  class 
10  cents  per  week;  and  in  B  class  5  cents  per  week,  to  be  paid  to  the  secretary  in 
advance. 

SECTION  3.     All  money  received  shall  be  placed  in  one  general  fund. 

SECTION  4.  That  the  association  set  aside  50  per  cent,  of  the  earnings  of  the 
money  at  interest  to  be  used  in  taking  care  of  tuberculosis  cases. 

Article  V. 

SECTION  1.  Any  member  of  the  association  unable  to  attend  to  his  or  her  duties 
through  sickness  or  disability  must  notify  the  secretary  within  one  week  from  the 
date  of  such  sickness  or  disability,  and,  upon  the  written  recommendation  of  the 
attending  physician,  shall  be  entitled  to  receive  from  the  association  out  of  the 
funds  then  on  hand,  if  a  member  of  the  AA  class,  $1.50  per  day;  of  the  A  class, 
$1  per  day;  and  if  of  the  B  class,  50  cents  per  day,  Sundays  excepted,  for  a  period 
of  not  more  than  thirteen  weeks. 

SECTION  2.  When  a  member  is  entitled  to  benefits  the  secretary  shall  issue  an 
order  on  the  treasurer,  countersigned  by  the  president  and  one  trustee,  and  such 
benefit  shall  be  paid  weekly  in  such  amounts  as  the  By-Laws  provide. 

SECTION  3.  No  member  shall  be  entitled  to  draw  benefits  for  the  first  five  days 
of  disability,  Sunday  not  included,  but  thereafter  shall  be  entitled  to  benefits,  as 
provided  by  the  By-Laws,  Article  V,  section  1. 

SECTION  4.  Any  member  failing  to  notify  the  secretary  within  one  week  from 
the  date  of  commencement  of  sickness  or  disability  shall  be  considered  to  be  on 
the  sick  list  only  from  the  date  of  which  notice  is  given  to  the  secretary,  except 
when  quarantined. 

SECTION  5.  If  any  member  entitled  to  benefits,  and  having  drawn  same  and 
returned  to  work,  is  again  taken  sick  within  a  period  of  one  week,  such  second 
sickness  shall  be  considered  as  a  continuation  of  the  first  sickness,  and  the  member 
shall  be  only  entitled  to  benefits  for  such  a  number  of  days  as,  added  to  the  previous 
term  of  sickness,  shall  make  thirteen  weeks. 

SECTION  6.  Any  member,  having  drawn  benefits  for  the  full  term  of  thirteen 
weeks,  shall  not  be  entitled  to  further  benefits,  except  death,  until  he  or  she  shall 
have  been  at  work  for  a  period  of  not  less  than  four  weeks;  and  no  one  shall  draw 
during  one  year  benefits  for  more  than  eighteen  weeks  of  disability  dating  from 
time  of  commencement  of  first  disability  during  the  previous  twelve  months;  and 
any  member  drawing  for  eighteen  weeks'  disability  during  twelve  months  shall 
not  be  entitled  to  further  benefits  on  account  of  disability  until  she  or  he  shall 
have  been  at  work  for  a  period  of  sixty  days.  That  any  member  who  shall  have 
received  the  maximum  benefits  as  provided  in  this  section,  and  who  shall  thereafter 
be  continuously  totally  disabled,  shall,  without  the  payment  of  further  dues,  be 
considered  in  good  standing  and  entitled  to  receive  the  funeral  benefits  herein 
provided  for;  provided  they  report  to  the  secretary  every  two  weeks. 


214  SOCIAL  INSURANCE.  [Feb. 

SECTION  7.  No  benefits  shall  be  paid  for  any  sickness  or  injury  resulting  from 
hernia,  lumbago  or  lame  back,  straining  of  the  lumbar  muscles,  sciatic  rheumatism, 
neuritis,  venereal  diseases,  intoxication  or  violating  the  law,  fighting  or  scuffling. 

Sickness  and  accident  indemnity:  Monthly  benefits  shall  range  from  $26  to  $40 
per  month,  according  to  the  class,  A  or  AA.  The  following  is  a  partial  list  of  the 
diseases  covered  by  our  policies,  for  which  we  pay  indemnity  not  to  exceed  eighteen 
weeks  in  one  year,  contracted  after  policy  has  been  in  force  twenty-one  consecutive 
days:  lagrippe,  inflammation  of  the  lungs,  erysipelas,  enteritis  (inflammation  of 
bowels),  felons,  freezing,  fever  and  ague,  diabetes,  dysentery,  diarrhea,  cerebro- 
spinal  fever,  diphtheria,  Bright's  disease,  bilious  fever,  cancer,  carbuncle,  whooping 
cough,  pleurisy,  piles,  catarrhal  fever,  cholera,  congestion  of  the  brain,  conjunctivi- 
tis, mumps,  bronchitis,  boils,  blood-poisoning,  appendicitis,  anthrax,  abscess, 
typhoid-fever,  influenza,  intermittent  fever,  laryngitis,  lockjaw,  malarial  fever, 
yellow  fever,  peritonitis,  scarlet  fever,  membranous  croup,  meningitis,  neuralgia- 
pneumonia,  inflammation  of  pancreas,  inflammation  of  brain,  inflammation  of 
liver,  heart  disease,  gastric  fever,  inflammation  of  eyes,  sore  throat,  smallpox,  sun- 
stroke, summer  complaint,  tonsillitis,  typholitis,  tuberculosis,  shingles,  perity- 
phlitis,  rheumatism  (inflammatory). 

Accident  indemnity:  dislocations,  fractures,  bruises,  broken  bones,  cuts,  crush- 
ing or  mangling,  gunshot  wounds,  burns  or  scalds,  bites  of  dogs  or  other  animals, 
sprained  ankle,  stroke  of  lightning,  surgical  operation,  injuries  received  at  home, 
in  the  office,  shop,  factory,  yard  or  on  the  street;  injuries  inflicted  by  robbers  or 
highwaymen,  traveling  on  passenger  trains,  steamboats  or  street  cars;  walking, 
riding,  driving,  bicycling,  going  to  or  from  work,  and  in  all  the  ordinary  vocations 
of  life. 

SECTION  8.  The  board  of  trustees  may  refuse  to  grant  benefits  to  a  member  if  it 
is  shown  on  investigation  that  he  or  she  is  not  entitled  to  such  benefits.  No  member 
shall  leave  the  city  while  on  disability  list  without  a  permit  from  the  secretary. 

SECTION  9.  On  the  death  of  any  member  in  good  standing,  who  has  been  a 
member  at  least  ninety  consecutive  days  at  the  time  such  occurs,  a  funeral  benefit 
shall  be  paid  his  legal  beneficiary,  or  payment  direct  to  the  undertaker  and  other 
creditors  shall  be  a  proper  compliance  with  this  section  whenever  the  association 
deems  it  proper  to  do  so,  —  if  a  member  of  AA  class,  $75,  or  if  a  member  of  A  class, 
$50,  or  if  a  member  of  B  class,  $25,  payable  within  thirty  days  after  due  notice  has 
been  given  to  the  secretary. 

SECTION  10.  In  the  event  of  the  death  of  any  member  suitable  flowers  shall  be 
procured  at  a  cost  not  to  exceed  $5  and  presented  to  the  relatives  or  friends  of  the 
deceased  by  the  association. 

SECTION  11.  Any  person  detected  in  obtaining  or  attempting  to  obtain  benefits 
fraudulently  shall  be  expelled  from  the  association.  The  board  of  trustees  may 
cause  the  name  of  any  such  member  to  be  erased  from  the  roll  of  membership. 

SECTION  12.  All  properties  of  the  association  held  by  officers  of  the  association 
at  the  expiration  of  their  term  of  office  must  be  turned  over  to  their  successors. 

SECTION  13.  A  semiannual  statement  of  the  financial  condition  of  the  associa- 
tion shall  be  posted  in  some  prominent  place  in  the  works  of  the  associated  factories. 
SECTION  14.  The  bonds  required  to  be  given  by  the  secretary  and  treasurer 
shall  be  given  to  such  person  as  the  board  of  trustees  may  designate,  who  shall  hold 
the  same  in  trust  for  the  association  and  who  shall  be  entitled,  in  case  of  default  in 
his  own  name,  to  bring  all  necessary  suits  or  proceedings  to  enforce  the  same  for 
the  benefit  of  the  association. 

Article  VI. 

SECTION  1.  The  Constitution,  By-Laws  and  Special  Rules  of  the  association 
may  be  amended  or  repealed  at  the  annual  meeting  by  a  two- thirds  vote  of  the 
members  present  at  such  meeting;  provided,  however,  that  two  weeks'  notice  of 
such  intended  action  shall  be  given  to  the  secretary  by  the  board  of  trustees  and 


1 


1917.]  HOUSE  —  No.  1850.  215 

inserted  in  the  call  for  such  meeting,  and  that  notice  of  the  meeting  shall  be  posted, 
for  at  least  one  week  previous  to  the  meeting,  in  the  prominent  places  of  each  of 
the  associated  factories,  and  all  proposed  amendments  shall  be  voted  on  as  posted; 
also  for  the  transaction  of  such  other  business  as  may  legally  come  before  the 
meeting. 

O.   J.   SCHNEIDER,   President. 

F.   W.    BOSWELL,  Secretary. 
128  EAST  KEARSLEY  STREET,  BELL  PHONE  313. 

Remember,  if  your  dues  are  not  paid  you  will  not  receive  benefits  in  case  of  disability. 

The  following  is  a  detailed  account  of  the  supplementary  compensation 
plan  of  the  Flint  Vehicle  Factories'  Association:  — 

The  supplementary  compensation  plan  was  the  outcome  of  a  desire  on  the  part 
of  the  manufacturers  to  extend  aid  to  those  of  their  employees  who  are  still  sick 
and  in  need  of  financial  assistance  after  they  have  received  the  thirteen  weeks' 
benefits  provided  by  the  policies  of  the  Flint  Vehicle  Factories'  Mutual  Benefit 
Association. 

The  only  conditions  necessary  for  a  workman  to  avail  himself  of  the  provisions 
of  this  plan  are  — 

(a)  That  he  (or  she)  be  an  employee  of  one  of  the  above-named  factories  at  the 
time  the  sickness  began. 

(6)  That  he  (or  she)  be  a  member  in  good  standing  (i.e.,  with  all  dues  paid  in 
full)  of  the  Flint  Vehicle  Factories'  Mutual  Benefit  Association  at  the  time  the 
sickness  began. 

(c)  That  he  (or  she)  shall  have  been  unable  to  work  for  a  period  exceeding 
thirteen  weeks,  during  which  time  he  (or  she)  shall  have  drawn  all  benefits  provided 
for  by  the  provisions  of  the  Flint  Vehicle  Factories'  Mutual  Benefit  Association 
policy,  or,  in  case  death  occurs  at  any  time,  the  dependents  will  immediately  be 
eligible  to  draw  benefits  in  either  Class  1,  2  or  3,  as  the  case  may  be,  subject  to 
conditions  (d)  and  (e)  below. 

(d)  That  the  need  of  assistance  either  by  the  workman  himself,  or,  in  case  of 
his  death,  by  his  dependents,  be  shown  to  the  satisfaction  of  the  executive  com- 
mittee. 

(e)  That  the  continued  dependence  of  the  beneficiaries  be  shown  at  any  time  the 
executive  committee  may  request  such  proof. 

(/)  That  formal  application  for  compensation  be  made  on. blanks  to  be  furnished 
by  the  Manufacturers  Association  of  Flint. 

Please  note  that  there  are  no  fees  to  pay  and  no  disagreeable  conditions  to  be 
met. 

For  the  purpose  of  this  plan,  workmen  enjoying  compensation  thereunder  will 
be  classified  under  three  heads,  to  be  known  as  Class  1,  Class  2  and  Class  3. 

C7ass  1 .  —  Single  man  (or  woman)  or  married  man  (or  woman)  with  no  dependent 
children. 

Under  this  class  the  dependents  are  wife  (or  husband),  parents,  brothers  and 
sisters,  as  the  case  may  be. 

C7ass  2.  —  Married  man  (or  woman)  with  one  dependent  child  under  fifteen 
years  of  age  (or  over  fifteen  years  of  age  if  physically  or  mentally  incapacitated 
for  earning). 

Under  this  class  the  dependents  include  the  dependent  child  in  addition  to  those 
enumerated  under  Class  1. 

Class  3.  —  Married  man  (or  woman)  with  two  or  more  dependent  children  under 
fifteen  years  of  age  (or  over  fifteen  years  of  age  if  physically  or  mentally  incapacitated 
for  earning). 


216  SOCIAL  INSURANCE.  [Feb. 

Under  this  class  the  dependents  include  the  dependent  children  in  addition  to 
those  enumerated  under  Class  1. 

The  maximum  amount  of  compensation  to  be  paid  each  class  will  be  as  follows:  — 

For  death,  or  for  total  disability  from  sickness  from  causes  covered  by  certificate 
of  the  Flint  Vehicle  Factories'  Mutual  Benefit  Association  during  a  period  which 
cannot  exceed  one  hundred  and  four  weeks:  Class  1,  $7;  Class  2,  $8;  Class  3,  $9 
per  week. 

Note.  —  Maximum  compensation,  both  as  regards  amount  paid  and  time  limit 
of  payment,  will  be  paid  in  exceptional  cases  only,  as  our  intention  is  simply  to 
relieve  suffering  and  distress  temporarily,  not  to  provide  support  for  two  years  or 
any  part  thereof. 

For  partial  disability  from  sickness  from  causes  covered  by  certificate  of  the 
Flint  Vehicle  Factories'  Mutual  Benefit  Association:  Such  payments  will  be 
made  as  seems  fair  in  each  individual  case. 

In  order  that  the  supplementary  compensation  plan,  as  it  is  called,  may  accom- 
plish the  good  intended,  we  will  need  the  active  co-operation  of  the  entire  member- 
ship of  the  Flint  Vehicle  Factories'  Mutual  Benefit  Association;  and  as  the 
conditions  imposed,  in  order  that  your  members  may  avail  themselves  of  these 
benefits,  are  not  at  all  arduous,  we  feel  sure  that  you  will  do  all  you  can  to  bring 
the  workings  of  this  plan  to  the  attention  of  each  and  every  factory  employee, 
that  they  and  their  families  may  be  eligible  to  relief  in  case  prolonged  illness  or 
death  visits  them. 

Nearly  four  years  have  passed  since  the  supplementary  compensation  plan  was 
first  put  in  operation,  and  over  $30,000  have  been  spent  to  relieve  suffering  and 
want,  and  68  of  our  employees  and  their  families  have  been  aided. 


METHOD  OF  ADMINISTRATION  OF  THE  RELIEF  DEPARTMENT 
OF  A  LARGE  PITTSBURGH  MANUFACTURING  PLANT  MAKING 
ELECTRICAL  APPARATUS. 

The  "relief  department"  is  a  department  of  the  company's  service  in  executive 
charge  of  a  superintendent,  whose  directions  in  carrying  out  its  regulations  are 
complied  with,  subject  to  control  of  the  president,  except  in  such  matters  as  are 
under  control  of  the  advisory  committee. 

The  object  of  the  department  is  to  administer  a  trust  fund  known  as  "the  relief 
fund"  for  the  payment  of  benefits  to  employees  contributing  thereto  who  are 
known  as  members  of  the  relief  department,  when  under  these  regulations  such 
benefits  are  awarded  for  total  disability  due  to  causes  other  than  accident  occurring 
while  performing  duties  as  an  employee  of  the  company,  and  for  the  payments  oi^ 
benefits  to  their  dependents,  next  of  kin  or  beneficiaries  designated  by  them, 
with  the  approval  of  the  superintendent,  when  under  these  regulations  such  benefits 
are  awarded  on  account  of  death  due  to  causes  other  than  such  accident;  also  to 
perform  such  other  duties  and  functions  as  are  prescribed  in  these  regulations  or 
may  be  imposed  by  the  board  of  directors. 

The  "relief  fund"  consists  of  contributions  from  members,  income  derived  from 
investments  and  from  interest  paid  by  the  company,  and  appropriations,  advances 
or  gratuities  by  the  company  or  others. 

The  moneys  received  for  the  relief  fund  are  held  by  the  company  in  trust  for  the 
members  of  the  department  and  their  dependents,  next  of  kin  or  other  beneficiaries, 
to  whom  benefits  have  been  or  shall  be  awarded  against  such  fund. 

The  company,  being  the  trustee  of  4hc  relief  fund,  any  part  of  the  fund  may  be 
invested  by  the  treasurer  in  such  securities  as  are  approved  by  the  president  and 
executive  committee,  and  are  in  the  name  of  the  company  "in  trust  for  the  relief 
fund." 

If  the  amount  contributed  by  the  members  of  the  relief  department,  with  interest 


1917.1  HOUSE  —  No.  1850.  217 


an. 


rl  other  income,  is  not  sufficient  to  pay  the  benefits  as  they  become  due,  the  com- 
pany advances  from  its  own  treasury  whatever  sums  may  be  necessary  for  this 
purpose,  reimbursing  itself,  with  interest  at  3  per  cent,  per  annum,  when  the  con- 
tributions of  members  and  other  income  are  sufficient  therefor. 

If  at  any  time  there  is  a  surplus  after  making  due  allowance  for  liabilities  over 
and  above  what  is  required  to  provide  for  the  full  and  prompt  payment  of  all 
benefits  and  a  reasonable  contingent  fund,  such  surplus  is  applied  to  increase  the 
benefits  to  members  in  such  manner  as  is  determined,  upon  advice  of  an  actuary, 
by  a  vote  of  two-thirds  of  the  committee,  approved  by  the  company. 

The  condition  of  the  account  books  and  the  relief  fund  at  the  close  of  each  fiscal 
year  is,  on  behalf  of  the  members,  audited  and  reported  upon  by  a  competent 
person  or  persons  selected  for  that  purpose  by  the  committee  who  represent  the 
members  of  the  relief  department,  and  the  company's  auditor  makes  an  independent 
audit  on  behalf  of  the  company. 

The  company  has  general  charge  of  the  department;  provides  for  the  fulfilment 
of  its  obligations;  has  the  custody  of  all  moneys  and  assets  belonging  to  the  relief 
fund,  and  is  responsible  for  their  safekeeping  and  investment;  pays  into  the  fund 
interest  at  the  rate  of  4  per  cent,  per  annum  on  monthly  balances  in  its  hands  and 
all  interest  or  other  earnings  derived  from  investment  of  moneys  of  the  fund; 
supplies  the  necessary  facilities  for  conducting  the  business  of  the  department; 
and  pays  all  operating  expenses  thereof. 

The  president  appoints  a  superintendent,  who  has  charge  of  all  business  per- 
taining to  the  department.  He  employs  such  clerks  and  other  assistants,  subject 
to  approval  of  the  president,  as  are  necessary,  prescribes  the  forms  and  blanks  to 
be  used,  certifies  all  bills  and  pay  rolls  of  the  department,  signs  all  warrants  for 
payment  of  benefits  and  other  authorized  expenses,  furnishes  the  committee  such 
reports  as  they  may  require,  decides  all  questions  properly  referred  to  him,  and 
exercises  such  other  authority  as  is  conferred  upon  him  by  the  president  or  by  the 
committee. 

There  is  a  medical  director  and  one  or  more  medical  examiners  or  other  medical 
officers.  The  medical  director  is  subject  to  the  control  and  approval  of  the 
superintendent,  and  has  general  supervision  of  the  medical  and  surgical  affairs  of 
the  department. 

The  medical  director  and  medical  examiners  or  other  medical  officers  make  the 
required  physical  examinations  of  applicants  for  membership ;  report  the  condition 
of  sick  and  injured  members;  determine  when  members  are  disabled  and  the  cause 
and  extent  of  disability,  and  report  when  they  are  able  to  work;  pass  upon  proof 
of  the  fact  and  cause  of  death;  and  perform  such  other  duties  as  are  required  by 
the  superintendent. 

The  medical  director  and  medical  examiners,  or  other  medical  officers  as  such, 
render  professional  service  only  in  their  respective  offices,  and  do  not  accept  fees 
or  other  remuneration  for  such  or  other  service  under  these  regulations  under  any 
circumstances. 

Note.  —  The  company  does  not  undertake  to  furnish  free  medical  treatment, 
but  in  case  of  sickness  while  on  duty,  renders  first  aid,  and  in  case  of  accident  while 
on  duty,  in  addition,  furnishes  such  other  medical  and  surgical  treatment  as  is  set 
forth  under  the  company's  accident  compensation  plan. 

There  is  an  advisory  committee  of  eighteen  members  and  a  chairman,  all  of  whom 
to  be  eligible  must  be  members  of  the  relief  department,  constituted  as  follows: — 

The  president  of  the  company  is  ex  officio  a  member  and  chairman  of  the  com- 
mittee. 

The  other  members  of  the  committee  are  chosen  annually  in  December  to  serve 
one  year  from  the  first  day  of  January  next  succeeding,  or  until  their  successors 
are  chosen,  as  follows:  — 

One-half  is  appointed  by  the  president  and  one-half  elected  by  the  employees, 
who  are  members  of  the  relief  department,  from  among  themselves,  on  the  basis 


218  SOCIAL  INSURANCE.  [Feb. 

of  membership  in  the  different  subdivisions,  as  provided  in  the  following  regu- 
lations: — 

The  members  of  the  committee  chosen  by  members  of  the  relief  department  are 
elected  by  ballot,  one  member  to  be  elected  from  each  of  seven  subdivisions  of  the 
shops  and  offices  known  as  "election  districts."  Such  districts  are  apportioned 
and  rearranged  annually  according  to  membership  in  the  relief  department,  and 
are  duly  announced  by  bulletin  notices  a  reasonable  time  before  each  annual  elec- 
tion. The  ballots  are  taken  and  the  count  certified  under  oath  by  tellers.  The 
member  receiving  the  greatest  number  of  legal  ballots  in  and  from  his  individual 
district  shall  be  declared  elected. 

The  tellers  are  elected  by  the  elected  members  of  the  advisory  committee,  but 
no  member  of  the  relief  department  known  to  be  a  candidate  for  membership  on 
the  advisory  committee,  nor  any  member  of  the  advisory  committee,  is  eligible 
for  an  appointment  as  teller. 

No  officer,  foreman,  assistant  foreman,  inspector  or  boss  of  the  company  is 
eligible  for  election  to  represent  the  members. 

In  balloting  for  members  of  the  committee  each  member  of  the  relief  committee 
in  good  standing  is  entitled  to  cast  one  vote,  but  no  voting  by  proxy  is  permitted. 
In  event  of  the  termination  of  service  of  any  member  of  the  committee,  or  of  his 
withdrawal  from  or  loss  of  membership  in  the  relief  department,  or  of  his  employ- 
ment by  the  committee  in  the  capacity  making  him  ineligible  for  membership  on 
the  committee,  his  membership  on  the  committee  thereupon  terminates. 

A  vacancy  among  the  elected  members  is  filled  by  the  succession  to  the  position 
of  the  employee  who  received  the  next  number  of  votes  of  members  of  the  same 
district  from  which  the  retiring  member  was  elected  at  the  last  election,  and,  in 
default  of  any  such  person,  the  majority  of  the  members  of  the  advisory  committee 
elected  by  the  members  fills  the  vacancy  by  electing  a  member  from  the  same 
district  as  the  retiring  member. 

A  vacancy  among  the  members  chosen  to  represent  the  company  is  filled  by 
appointment  by  the  president. 

The  superintendent  is  ex  officio  secretary  of  the  committee,  but  is  not  a  member 
thereof. 

The  committee  has  general  supervision  of  the  operations  of  the  department,  and 
sees  that  they  are  conducted  in  accordance  with  the  regulations. 

The  committee  holds  stated  meetings  once  in  three  months  at  such  time  and 
place  as  the  chairman  determines,  and  meets  at  other  times  at  the  call  of  the  chair- 
man. A  quorum  of  the  advisory  committee  consists  of  five  members  who  have 
been  elected  to  represent  the  members,  and  five  who  represent  the  company. 

It  is  the  duty  of  the  chairman  to  call  special  meetings  of  the  committee  upon 
the  written  request  of  five  members  thereof. 

Amendments  to  these  regulations  are  proposed  at  any  meeting  of  the  com- 
mittee by  any  member  thereof,  and  are  acted  upon  at  any  subsequent  meeting,  a 
majority  of  the  whole  committee  being  necessary  to  pass  the  same. 

No  amendments  take  effect  until  approved  by  the  board  of  directors  and  pro- 
mulgated by  the  superintendent;  when  so  made,  approved  and  promulgated  an 
amendment  binds  the  company,  all  members  of  the  relief  department  and  all 
persons  claiming  benefits  on  account  of  disability  or  death  incurred  after  the  date 
specified  in  the  promulgation  of  the  same. 

Membership  in  the  relief  department  is  confined  to  employees  of  the  company 
residing  in  the  United  States,  excluding  Alaska  and  other  outlying  territory,  and 
is  based  upon  an  application  in  the  following  form:  — 

To  the  Superintendent  of  the  Relief  Department. 

I of 

in    the    county    of , and   the    State   of 

now    employed    by    the    company,    do 


1917.] 


HOUSE  —  No..  1850.  219 


hereby  apply  for  membership  in  the  relief  department  of  said  company,  and  consent 
and  agree  to  be  bound  by  the  regulations  of  said  relief  department,  which  regula- 
tions I  have  read  or  have  had  read  to  me,  and  by  any  and  all  amendments  thereto 
and  by  any  other  regulations  of  said  department  hereafter  adopted  and  in  force 
during  my  membership. 

Unless  I  shall  hereafter  otherwise  designate  in  writing,  with  the  approval  of  the 
superintendent  of  the  relief  department,  a  beneficiary,  any  death  benefits  payable 

in  a  lump  sum  shall  be  payable  to  my  wife  (or  husband)  (name  in  full) 

, provided  I  have  given 

written  notice  of  my  marriage  to  the  superintendent  of  the  relief  department;  or 
if  I  leave  no  wife  (or  husband)  me  surviving,  then  to  my  children  collectively, 
each  to  be  entitled  to  an  equal  share;  or  if  there  be  no  such  children  living,  then 

to  (name  in  full) of 

if  living,   and  if  not  living,   then  to 

my  father  and  mother  jointly  or  to  the  survivor;  or,  if  neither  be  living,  then  to 
my  next  of  kin,  payment  in  behalf  of  such  next  of  kin  to  be  made  to  my  legal  repre- 
sentatives; or,  if  there  be  no  such  next  of  kin,  the  death  benefits  shall  lapse  and 
the  amount  thereof  shall  remain  as  a  part  of  the  relief  fund  without  claim  for  the 
same. 

I  certify  that  I  am years  of  age,  correct  and  temperate  in  my  habits, 

that  as  far  as  I  am  aware  I  am  now  in  good  health,  and  have  no  injury  or  disease, 
constitutional  or  otherwise,  except  as  shown  on  the  accompanying  statement  made 
by  me  to  the  medical  officer,  which  statement  shall  constitute  a  part  of  this  applica- 
tion. 

In  witness  whereof,  I  have  signed  these  presents  at 

in     the     county     of State 

of this day  of 

A.D.    191 . . . . ,    this    application   to    take 

effect  at  once,  or  on  such  subsequent  dates  as  may  be  designated  by  said  superin- 
tendent: provided,  however,  that  if  I  shall  become  disabled  before  said  date,  and 
continue  disabled  beyond  said  date,  this  application  shall  not  take  effect  until 
the  first  day  after  my  recovery. 


Signature  of  Applicant. 

Check  or  Pass  No Section  or  Department 

Witness 

The  foregoing  application  is  approved  at  the  office  of  the  superintendent  at 

in  the  county  of 

State     of this day 

of A.D.  191 

Signed 

Superintendent  of  Relief  Department. 

The  last  application  in  the  foregoing  form  which  is  made  by. an  employee  is 
known  as  his  principal  application. 

Upon  approval  of  the  principal  application  by  the  superintendent  the  applicant 
is  a  member  on  and  from  the  date  specified  in  such  approval,  and  the  superintendent 
issues  to  him  a  certificate  of  membership  attached  to  a  copy  of  the  regulations 
then  in  force. 

The  applicant  is  required  to  answer  any  questions  that  may  be  put  to  him  by 
the  medical  examiner  or  the  medical  director  concerning  his  physical  condition  and 
family  history,  and  if  he  makes  any  untrue  answer  thereto,  or  conceals  any  facts 
from  the  said  medical  examiner  or  medical  director,  or  attempts  to  defraud  or 
impose  upon  the  relief  department,  or  make  any  untrue  statement  either  verbally 
or  in  his  application,  he  forfeits  his  membership  in  the  relief  department  and  all 
benefits,  rights  or  equities  arising  therefrom. 


220  SOCIAL  INSURANCE.  [Feb. 

If  an  applicant  for  membership  has  a  physical  defect  which  would  preclude  the 
approval  of  his  application  if  presented  unconditionally,  his  application  may 
nevertheless  be  approved,  provided  that  he  execute  an  agreement  in  writing  satis- 
factory to  the  superintendent,  to  the  effect  that  he  shall  not  be  entitled  under  his 
membership  to  any  benefits  for  disability  caused  by,  arising  from,  or  growing  out 
of  such  defects;  such  agreement  is  attached  to  and  made  part  of  said  application, 
and  such  modification  of  the  foregoing  prescribed  form  of  principal  application  is 
hereby  authorized. 

If  an  employee  entitled  to  become  a  member  upon  passing  a  satisfactory  physical 
examination,  and  who  has  not  previously  been  examined  and  rejected,  has  executed 
a  prescribed  form  of  "preliminary  application,"  but  has  not  had  an  opportunity 
to  be  examined  before  the  date  specified  thereon  for  his  application  to  take  effect, 
he  is  protected  by  such  preliminary  application  under  and  in  accordance  with  the 
terms  of  the  prescribed  form  of  principal  application  from  said  date  until  he  has 
had  opportunity  to  be  examined:  provided,  however,  that  he  is  only  entitled  to 
benefits  payable  on  account  of  injuries  or  death  caused  solely  by  accident  occurring 
while  off  duty,  and  if  his  principal  application  is  not  approved  his  rights  and  obliga- 
tions in  the  relief  department  cease  from  the  time  of  physical  examination;  and 
if  he  refuses  or  neglects  to  be  examined  when  opportunity  for  examination  is  offered, 
his  rights  and  obligations  in  the  relief  department  thereupon  cease. 

An  applicant  protected  in  accordance  with  the  foregoing  against  accident  only, 
contributes  at  half  rate  while  so  protected. 

No  applicant  is  admitted  at  an  age  beyond  fifty  years  or  without  a  physical 
examination. 

Every  member  of  the  relief  department  must  enter  the  class  corresponding  to 
his  regular  wage  or  salary,  in  order  to  be  entitled  to  the  benefits  thereof  and  to  be 
eligible  to  enjoy  for  himself  and  his  family  the  privileges  and  benefits  of  the  service 
pensions.  The  class  of  every  member  is  determined  by  the  superintendent. 

An  employee  upon  joining  the  relief  department  must  enter  the  class  to  which 
his  salary  or  wages  makes  him  eligible,  omitting  overtime  and  occasional  loss  of 
time;  further  change  in  class  is  only  made  at  the  request  of  the  member  himself, 
and  then  but  to  the  class  his  salary  or  wages  shall  at  such  subsequent  time 
entitle  him  to  belong.  There  are  six  classes  of  members,  as  follows :  — 


MONTHLY  PAY. 

Class. 

Less  than  $30  

Half  rate 

130  or  more,  but  less  than  $45  

First. 

$45  or  more,  but  less  than  $60,   

Second 

$60  or  more,  but  less  than  $75,    • 

Third 

$75  or  more,  but  less  than  $95  

Fourth 

$95  or  more,         

Fifth 

No  employee  is  required  to  become  a  member  of  the  relief  department;  but  only 
members  of  the  relief  department  are  eligible  for  service  pensions. 

In  case  of  claim  for  benefits  the  class  of  the  member  is  determined  by  the  con- 
tribution made  by  or  for  him  immediately  prior  to  disability  or  death. 

An  employee  cannot  remain  a  member  in  a  class  other  than  that  allowed  by  his 
pay. 

The  superintendent  is  authorized  to  change  the  class  and  contribution  of  a 
member  when  his  wages  or  salary  call  for  it.  If  a  member  declines  to  permit  such 
change  his  membership  terminates. 


1917.]  HOUSE  — No.  1850.  221 

A  member  may  withdraw  from  the  relief  department  at  the  end  of  any  month 
upon  giving  written  notice  to  the  superintendent  before  the  fifteenth  day  of  that 
month  on  the  prescribed  form  of  withdrawal  notice,  copy  of  which  is  furnished 
on  request. 

The  membership  of  an  employee  guilty  of  habitual  or  frequent  drunkenness, 
disreputable  or  publicly  unlawful  conduct,  may  be  terminated  at  any  time. 

A  member  whose  furlough  is  suspended,  or  who  is  otherwise  temporarily  relieved 
from  the  service  for  a  specified  time  not  to  exceed  two  months,  may  retain  his 
membership  during  such  absence,  subject  to  approval  of  the  superintendent,  by 
paying  his  contributions  as  they  fall  due.  His  foreman  or  head  of  department 
notifies  the  superintendent  at  the  beginning  of  such  absence,  specifying  the  time 
set  for  return  to  duty,  and  if  at  that  time  the  member  does  not  return  to  duty 
his  membership  in  the  relief  department  thereupon  terminates,  unless  otherwise 
previously  arranged  by  him  with  the  superintendent. 

When  a  member  leaves  the  service  of  the  company  for  any  cause  whatever, 
his  membership  in  the  relief  department  terminates,  and  he  is  not  entitled  to  any 
benefits  for  time  thereafter,  except  such  as  he  may  be  entitled  to  by  reason  of  dis- 
ability beginning  and  reported  before  and  continuing  without  interruption  to  and 
after  such  termination  of  employment. 

A  member  absenting  himself  from  duty  for  a  period  of  six  days  without  per- 
mission of  his  employing  officer  previously  obtained,  or  without  giving,  meanwhile, 
reasons  for  absence  satisfactory  to  his  foreman  or  head  of  his  department,  is  held  to 
have  left  the  service,  and  his  membership  is  held  to  have  terminated  on  the  day 
preceding  such  absence.  If  such  member  is  reinstated  in  the  service  he  is  also 
reinstated  in  membership  upon  approval  of  the  superintendent. 

A  member  relieved  from  the  service  and  afterwards  re-employed  may  again 
become  a  member  of  the  relief  department,  although  then  over  fifty  years  of  age, 
upon  application  at  the  time  of  employment,  upon  passing  a  satisfactory  physical 
examination  in  which  his  physical  condition  at  the  termination  of  former  employ- 
ment is  given  due  consideration,  and  upon  approval  of  his  application  by  the 
superintendent. 

When  a-  member  is  in  arrears  for  two  months  his  membership  thereupon  ter- 
minates. 

A  member  resuming  work  for  the  company  before  he  has  been  in  arrears  two 
months  is  protected  from  the  time  of  resuming  work,  subject  to  the  approval  of 
the  medical  director  and  the  superintendent,  and  the  arrears  are  paid  on  the  next 
pay  roll. 

Members  keep  the  superintendent  of  the  relief  department  informed  of  their 
addresses  and  of  any  change  therein. 

The  word  "contributions"  wherever  used  in  these  regulations  is  held  and  con- 
strued to  refer  to  such  designated  portions  of  wages  or  salary,  payable  by  the  com- 
pany to  an  employee,  as  is  provided  in  these  regulations,  or  that  the  company 
shall  apply  for  the  purpose  of  securing  the  benefits  of  the  relief  fund,  or  to  such 
cash  payments  as  it  may  be  necessary  for  a  member  to  make  for  said  purpose,  or 
donations  by  the  company  to  the  relief  fund. 

Contributions  are  made  by  members  monthly  at  the  following  rates,  and  continue 
to  be  paid  during  disability:  — 

Half  rate,  wages  less  than  $30  per  month, $0.25 

First  class,  wages  30  or  more,  but  less  than  $45  per  month,          .          .  .  50 

Second  class,  wages  $45  or  more,  but  less  than  $60  per  month,  .          .        .75 

Third  class,  wages  $60  or  more,  but  less  than  $75  per  month,      .          .          .1.00 
Fourth  class,  wages  $75  or  more,  but  less  than  $95  per  month,  .     1.25 

Fifth  class,  wages  $95  or  more  per  month,          .          .          .          .          .          .     1 . 50 

The  amount  of  the  average  monthly  wages  or  salary  is  determined  by  the  superin- 
tendent, subject  to  review  by  the  advisory  committee. 


222  SOCIAL  INSURANCE.  [Feb. 

Contributions  for  each  month  are  due  on  the  first  day  of  that  month,  but  are 
ordinarily  deducted  from  the  member's  wages  or  salary  on  the  first  pay  roll  of 
the  following  month;  or  if  not  then  deducted  are  paid  to  the  superintendent. 

If  deduction  of  a  member's  contribution  from  his  wages  or  salary  is  omitted  from 
the  pay  roll  in  error,  the  fact  that  such  deduction  has  not  been  made  does  not 
debar  him  or  his  beneficiary  from  benefits  to  which  they  would  otherwise  be  entitled ; 
but  such  deduction  is  made  from  wages  or  salary  payable  thereafter. 

When  a  member  has  no  wages  or  salary  on  the  pay  roll,  any  contribution  due 
from  him  must  be  paid  in  cash  in  advance  to  the  superintendent;  otherwise  he  is 
in  arrears. 

No  member  f.alls  in  arrears  for  contributions  while  drawing  benefits  from  the 
relief  fund  for  disability,  provided  he  has  fully  complied  with  the  regulations 
during  his  disability.  A  sufficient  amount  may  be  withheld  from  benefits  to  pro- 
tect dues  for  one  month  in  advance  during  continuance  of  disability  for  which 
benefits  are  payable,  provided  an  insufficient  amount  is  due  the  member  on  the 
company  pay  roll. 

In  determining  the  contribution  for  a  part  of  a  month  the  amount  for  each  day 
is  one-thirtieth  of  the  amount  for  one  month,  and  the  amount  for  any  other  part 
of  a  month  is  determined  by  multiplying  the  amount  for  one  day  by  the  number 
of  days  in  such  part,  adding  to  make  even  cents  when  fractions  occur. 

In  determining  the  number  of  days  in  the  part  of  a  month  for  which  contri- 
bution is  collected,  the  actual  calendar  days  are  computed,  beginning  on  the  day 
on  which  the  application  takes  effect.  When  a  member's  service  terminates  there 
is  due  him  as  a  refund  any  excess  of  contribution  he  has  made  above  what  is  neces- 
sary to  adjust  his  accounts  to,  —  not  including  the  last  day  of  service,  —  but  no 
refund  is  due  on  the  death  of  a  member. 

Any  refund  of  contributions  due  a  member  is  payable  on  application  therefor 
by  such  person,  if  made  within  twelve  months  after  termination  of  membership 
upon  the  surrender  of  membership  certificate;  if  not  claimed  within  such  period 
it  reverts  to  the  relief  fund. 

Wherever  used  in  these  regulations  the  word  "disability"  is  held  to  mean  physical 
inability  to  work,  by  reason  of  sickness  or  accidental  injury,  while  not  -performing 
duties  as  an  employee  of  the  company,  and  the  word  "disabled"  applies  to  members 
thus  physically  unable  to  work;  the  decision  as  to  when  members  are  disabled, 
the  cause  and  extent  thereof,  and  as  to  when  they  are  able  to  work,  rests  with  the 
medical  officer,  subject  to  review  by  the  superintendent  and  the  committee. 

Whether  disability  at  any  time  shall  be  classified  as  due  to  accident  occurring 
while  not  performing  duties  as  an  employee  of  this  company  or  to  other  causes  is 
passed  upon  by  the  medical  officer,  who  transmits  the  same  with  his  recommenda- 
tions to  the  superintendent,  and,  if  he  deem  it  necessary,  transmits  the  same  to 
the  committee,  determination  by  which  is  final. 

In  considering  the  question  of  disability,  subjective  symptoms  or  alleged  feeling 
are  given  due  weight,  but  these  in  themselves,  unsupported  by  objective  and 
discoverable  symptoms,  do  not  entitle  a  member  to  be  considered  disabled. 

A  member,  becoming  disabled,  notifies  the  superintendent  or  his  local  repre- 
sentative immediately,  or  causes  him  to  be  notified.  In  reporting  disability  the 
member  also  gives  his  house  address.  If  he  fails  to  give  notice  until  he  recovers 
he  is  not  considered  disabled  before  the  day  on  which  notice  is  given,  unless  he 
proves  his  disability  before  that  day  to  the  satisfaction  of  the  superintendent 
and  gives  satisfactory  reason  for  delay  in  giving  notice. 

A  member,  becoming  disabled,  unless  incapacitated  therefor  by  his  disability, 
reports  immediately  in  person  to  the  medical  officer.  If  he  is  unable  to  do  so  he 
must  advise  the  superintendent  or  his  local  representative  in  writing,  informing 
him  of  the  nature  of  the  disability,  and  also  stating  the  name  and  address  of  his 
attending  physician,  if  any.  It  is  also  the  duty  of  a  disabled  member,  not  confined 
to  the  house  by  disability,  to  report  at  the  medical  officer's  office  from  time  to 


1917.]  HOUSE  — No.  1850.  223 

time  as  requested,  and  to  keep  any  other  appointment  made  by  that  officer  or  the 
superintendent  or  his  local  representative.  Members  who  avoid  the  medical 
officer,  or  neglect  to  report  or  keep  appointments  as  herein  provided,  are  not  entitled 
to  benefits. 

If  a  member  who  has  been  reported  by  the  medical  officer  as  able  to  work  is  not 
able  to  work  on  the  day  set,  he  immediately  communicates  with  the  medical  officer, 
reporting  to  him  in  person  if  possible;  otherwise,  he  is  not  considered  disabled  on  or 
after  the  date  set  for  his  return  to  work. 

A  member  becoming  disabled  during  definite  suspension,  furlough  or  other 
leave  of  absence,  and  while  away  from  his  usual  place  of  residenqe  when  on  duty, 
is  not  entitled  to  benefits  unless,  in  addition  to  reporting  his  disability  immediately 
as 'required  by  the  regulations,  he  proves  his  disability  while  absent  to  the  satis- 
faction of  the  superintendent  or  his  local  representative. 

A  "disabled  member,  desiring  to  absent  himself  for  any  length  of  time  from  his 
usual  place  of  residence  when  on  duty,  first  sees  the  superintendent  or  his  local 
representative  and  medical  officer,  and  obtains  approval  of  absence  for  a  specified 
time;  he  furnishes  to  the  medical  officer  satisfactory  certificates  of  disability 
during  absence,  keeps  him  informed  of  his  address  and  reports  to  him  immediately 
on  his  return.  If  such  disabled  member  goes  away  and  remains  away  without 
previously  consulting  the  superintendent  or  the  medical  officer  and  obtaining 
approval  of  absence  for  a  specified  time,  or  overstays  his  leave,  he  is  not  entitled  to 
benefits  for  any  time  of  absence  unless  he  proves  his  disability  while  absent  to  the 
satisfaction  of  the  superintendent,  and  gives  satisfactory  reason  for  failure  to  consult 
the  medical  officer  before  leaving. 

After  a  member  has  sufficiently  recovered  from  a  disability,  for  which  benefits 
or  compensation  have  been  paid,  to  resume  work,  he  is  restored  to  full  membership 
if  he  is  immediately  re-employed  by  the  company. 

A  member  is  entitled  to  receive  from  the  relief  fund  benefits  continuously  after 
the  first  week  during  any  total  disability  due  to  sickness;  he  is  likewise  entitled 
to  receive  benefits  from  the  first  day  during  any  total  disability  due  to  accident 
occurring  while  off  duty;  in  neither  case,  however,  are  benefits  paid  beyond  the 
day  when  such  disabled  employee  is  awarded  a  service  pension  by  the  company. 

A  member  is  not  entitled  to  benefits  from  any  cause  while  totally  disabled  from 
a  preceding  cause  and  receiving  benefits  therefor. 

While  wages  or  salary  are  received  from  any  source  whatsoever  during  disability, 
a  member  is  not  considered  totally  disabled  within  the  meaning  of  that  term  as 
employed  in  these  regulations,  and  no  benefits  for  total  disability  are  paid:  provided, 
that  after  the  fact  of  such  total  disability  is  established,  the  earning  of  less  than 
one-sixth  his  full  wages  or  salary  is  not  deemed  to  terminate  such  total  disability. 

Should  a  disabled  member  under  the  regulations  be  unable  or  otherwise  decline 
to  accept  benefits  he  does  not  thereafter  make  contribution.  If  such  member 
afterwards  accept  the  benefits  to  which  he  is  entitled,  a  proper  adjustment  of 
contribution  is  made. 

In  any  case  of  grave  injury  or  chronic  sickness,  where  the  member  desires  to 
accept  a  lump  sum  in  lieu  of  the  benefits  which  might  become  due  to  him  or  on 
his  account,  and  in  full  of  all  obligations  of  the  department  arising  from  his  member- 
ship, the  superintendent  has  authority  to  recommend  full  and  final  settlement  with 
such  member  for  such  amount  and  on  such  terms  as  may  be  agreed  upon  in  writing. 
All  such  proposed  settlements  are  based  upon  computation  of  commuted  value 
of  the  benefits  by  an  actuary,  and  are  not  effective  until  approved  by  the  committee 
after  ten  days'  written  notice  setting  forth  in  detail  what  the  benefits  are,  the 
proposed  commutation  and  the  reason  therefor. 

The  time  of  disability  is  considered  as  beginning  upon  the  first  day  upon  which 
no  wages  or  salary,  or  less  than  one-half  day's  wages  or  salary,  are  paid  because  of 
disability,  and  this  day  is  called  "first  day  wages  not  paid." 

Benefits  are  paid  in  conformity  with  financial  methods  of  the  department,  and 


224  SOCIAL  INSURANCE.  [Feb. 

on  warrants  drawn  by  the  superintendent  or  assistant  superintendent  upon  his 
receiving  satisfactory  certificates  respecting  the  claim  and  such  releases  as  are 
required  by  him. 

Benefits  on  account  of  continued  disability  are  payable  monthly.  Benefits  for 
short  periods  of  disability  are  paid  as  soon  as  the  amounts  due  can  be  ascertained 
after  return  to  duty. 

Benefits  payable  on  account  of  the  disability  of  a  member  are  payable  only  to 
such  member,  or  in  accordance  with  his  written  order  when  approved  by  the  super- 
intendent, or  to  his  legal  representative. 

When,  in  the  opinion  of  the  medical  director,  a  disabled  member  is  mentally 
incompetent,  disability  benefits  due  him  may,  at  the  direction  of  the  superintendent, 
be  paid  to  his  wife  or  to  some  other  member  of  his  family,  or  to  some  other  person 
in  law  charged  with  or  in  fact  assuming  his  care  and  custody,  for  the  use  and  benefit 
of  the  member,  and  such  payment  bars  any  subsequent  claim  on  the  part  of  the 
member  or  his  legal  representative  for  the  amounts  so  paid. 

Benefits  are  not  paid  for  disability  to  a  member  directly,  indirectly  or  partly 
due  to  his  intoxication  or  to  his  use  of  alcoholic  liquors  as  a  beverage,  or  to  his 
immoderate  use  of  stimulants  or  narcotics,  or  to  his  unlawful  acts  or  immoralities, 
or  to  venereal  diseases  (syphilis,  gonorrhea,  chancroids),  however  contracted,  or 
their  complications  (orcjiitis,  epididymitis,  stricture  or  bubo) ;  or  for  his  disability 
from  fighting  (unless  in  self-defense  agairtst  unprovoked  assault),  or  from  injury 
received  in  a  liquor  saloon,  gambling  or  any  disreputable  resort.  During  disability 
classed  as  non-beneficial  under  this  regulation,  members  who  keep  the  superintend- 
ent informed  of  their  addresses,  and  furnish  him  monthly  satisfactory  evidence  of 
continued  disability,  retain  title  to  death  benefits;  otherwise  their  membership 
is  held  to  have  terminated. 

Benefits  are  not  paid  for  disability  beginning  or  death  occurring  while  a  member 
is  in  arrears. 

A  member  is  not  entitled  to  benefits  if  he  declines  to  permit  the  medical  officer 
to  make  or  to  have  made  by  any  other  physician  such  examination  as  he  deems 
necessary  to  ascertain  his  condition. 

A  disabled  member  must  take  proper  care  of  himself  and  have  suitable  medical 
or  surgical  treatment.  The  payment  of  benefits  is  discontinued  if  he  refuses  or 
neglects  to  comply  with  the  recommendations  of  the  officers  of  the  relief  depart- 
ment as  to  proper  care  and  treatment. 

Claim  for  disability  benefits  is  made  within  thirty  days  after  they  accrue,  and 
claim  for  death  benefits  is  made  within  one  year  after  death. 

To  establish  a  claim  for  disability  benefits  the  case  must  be  reported  immediately 
to  the  relief  department.  In  case  of  accident  there  must  be  positive  and  visible 
external  evidence  of  physical  injury  sufficient  to  cause  disability.  In  case  of  sick- 
ness there  must  be  positive  evidence  of  acute  or  constitutional  disease  sufficient  to 
cause  disability,  and,  whenever  possible,  the  sick  or  injured  member  must  call  at 
once  or  as  soon  as  practicable  thereafter  at  the  medical  officer's  office  for  examina- 
tion. 

A  person  claiming  benefits  for  time  after  termination  of  service  is  not  entitled  to 
such  for  a  disability  arising  from  any  cause  occurring  after  such  termination,  nor 
in  any  case -unless  directly  due  to  a  cause  which  arose  out  of  the  disability  existing 
at  the  time  of  such  termination. 

Pending  determination  whether  disability  at  any  time  shall  be  classed  as  due  to 
accident  occurring  while  not  performing  duties  as  an  employee  of  the  company,  or 
to  other  causes,  benefits  are  paid  from  the  relief  fund,  and  if  upon  final  determina- 
tion any  sum  or  sums  shall  prove  thus  to  have  been  paid  from  the  relief  fund  which 
should  have  been  paid  by  the  company,  the  latter  shall  reimburse  the  relief  fund. 

In  case  of  alleged  sprain,  strain,  wrench  and  the  like,  where  external  physical 
proof  of  disabling  injury  is  lacking,  the  member  must  establish  substantial  history 


I 


917.]  HOUSE  — No.  1850.  225 


satisfactory  to  the  medical  officer  of  violence  accidentally  inflicted  sufficient  and 
liable  to  cause  disabling  injury. 

When  a  member  meets  with  an  accident  from  which  disability  may  result,  and 
on  account  of  which  he  wishes  to  reserve  the  right  to  claim  disability  benefits,  he 
reports  the  accident  immediately  upon  its  occurrence,  and  in  person,  if  possible, 
to  the  medical  officer. 

The  payment  by  the  company  of  any  amount  in  compromise  of  a  claim  for 
damages  or  compensation  arising  from  or  growing  out  of  an  injury  to,  or  the  sick- 
ness or  death  of,  a  member  bars  any  and  ail  claims  for  benefits  from  the  relief  fund. 

No  member  is  entitled  to  benefits  for  sickness,  nor  are  death  benefits  payable 
for  death  resulting  from  sickness  if  said  disability  begins  less  than  thirty  days  after 
date  of  formal  acceptance  as  a  member. 

Benefits  are  paid  for  each  calendar  week  and  fractional  parts  thereof  pro  rata, 
except  for  the  first  week  of  total  disability,  during  the  continuance  of  such  total 
disability,  but  not  beyond  the  day  when  the  disabled  member  is  awarded  a  service 

pension  at  the  following  rates:  — 

Per  Week. 

To  a  half-rate  member,           .          .          .          .          .          .          .          .     *     .  $2  75 

To  a  member  of  the  first  class,        .          .          .          .          .          .          .  5  50 

To  a  member  of  the  second  class,  .          .          .          .          .          .          .  8  25 

To  a  member  of  the  third  class,      .          .          .          .                    .          .          .  11  00 

To  a  member  of  the  fourth  class,    .          .          .          .          .          .          .  13  75 

To  a  member  of  the  fifth  class, 16  50 

Provided  that  no  benefits  are  paid  for  any  period  in  which  such  member  is  in 
receipt  of  wages  or  salary. 

Disability  resulting  from  infection  of  a  cut,  abrasion,  scratch,  puncture  or  other 
wound,  or  from  any  injury  not  immediately  disabling  or  not  reported  at  the  time  of 
the  occurrence  of  the  accident  causing  injury,  or  from  poison  however  taken  into 
or  acting  upon  the  body,  or  from  any  overdose  of  medicine  or  drug,  or  from  surgical 
operation  necessary  for  removal  of  some  defect  which  would  otherwise  probably 
produce  disability,  or  from  sunstroke  or  frostbite,  shall  be  classed  as  due  to  sickness. 

In  case  of  relapse  in  sickness,  disability  occurring  within  two  weeks,  the  first 
seven  days  are  not  deducted  in  computing  time  of  sick  benefits. 

Payment  upon  the  death  of  a  member  is  made  of  a  sum  to  be  determined  according 
to  the  class  of  the  member,  as  follows:  — 

Members  half  rate, $50 

Members  of  first  class,      ..........  100 

Members  of  second  class,  .........  125 

Members  of  third  class,    ..........  150 

Members  of  fourth  class,  .........  150 

Members  of  the  fifth  class, 150 

The  company  voluntarily  and  as  a  free  gift  contributes  an  amount  equal  to  that 
paid,  as  above,  by  the  relief  department  in  the  event  of  death.  The  company, 
however,  reserves  the  right  to  discontinue  such  voluntary  contribution  at  any  time 
it  may  deem  advisable. 

Death  benefits  are  not  paid  in  case  of  death  due  directly  or  indirectly  to  unlawful 
acts  of  the  diseased  member  or  at  the  hands  of  justice. 

Death  benefits  or  any  unpaid  disability  benefits  are  payable  to  the  beneficiary 
upon  proof  of  claim  and  execution  and  delivery  of  the  necessary  releases. 

A  part  or  all  of  the  death  benefits,  but  not  exceeding  $100,  is,  at  the  discretion 
of  the  superintendent,  paid  before  final  settlement  to  meet  funeral  or  other  urgent 
expenses  incident  to  the  death  of  a  member. 


226  SOCIAL  INSURANCE.  [Feb. 

No  employee  of  the  company,  except  authorized  department  officials,  has  au- 
thority to  contract  any  bills  against  the  department,  and  nothing  herein  is  held  to 
mean  or  imply  that  the  department  is  responsible  for  the  payment  of  such  bills  as 
any  other  employee  of  the  company  may  contract  or  his  physician  or  surgeon  may 
charge. 

In  any  controversy,  claim,  demand,  suit  at  law,  or  other  proceeding  between 
any  member,  his  beneficiary  or  legal  representative  and  the  company  or  the  relief 
department,  the  certificate  of  the  superintendent  as  to  any  facts  appearing  in  the 
records  of  the  relief  department  or  of  the  company,  or  his  statement  that  any 
writing  is  a  copy  taken  from  said  records,  or  of  any  instrument  on  file  in  said  de- 
partment or  with  the  company,  or  that  any  action  has  or  has  not  been  taken  by 
the  committee  or  board  of  directors,  is  prima  facie  evidence  of  the  existence  of  such 
records  and  their  accuracy,  and  of  all  the  facts  therein  stated. 

All  questions  or  controversies  of  whatsoever  character  arising  in  any  manner 
or  between  any  parties  or  persons  in  connection  with  the  relief  department  or  the 
operation  thereof,  as  to  any  claim  for  benefits  preferred  by  any  member  or  his 
legal  representative  or  his  beneficiary  or  any  other  person,  or  as  to  the  construction 
of  language  or  meaning  of  the  regulations,  or  as  to  any  writing,  decision,  instructions 
or  acts  in  connection  with  the  operation  of  the  department,  is  submitted  to  the 
superintendent,  whose  decision  is  final  unless  an  appeal  is  taken  to  the  committee 
within  thirty  days  after  notice  of  such  decision  is  given  to  the  parties  interested. 

When  an  appeal  is  taken  to  the  committee  it  is  heard  by  said  committee  at  their 
next  meeting,  or  at  such  future  meeting  as  they  may  designate,  provided  five  days' 
notice  of  said  meeting  be  given  to  the  appellant,  and  is  determined  by  a  vote  of  a 
majority  of  the  quorum,  or  any  other  number  not  less  than  a  quorum,  of  the  members 
present  at  such  meeting,  and  the  decision  reached  by  the  committee  is  final,  except 
that  it  is  reviewable  by  a  court  of  competent  jurisdiction,  by  an  action  brought 
within  thirty  days  after  notice  of  the  decision  of  the  committee  has  been  given  to 
the  appellant  or  mailed  to  him  at  his  last  known  post-office  address,  as  to  the 
right  of  any  party  to  recover  a  benefit. 

The  action  of  the  board  of  directors  in  establishing  the  relief  department,  in 
adopting  these  regulations,  and  in  making  contributions  is  not  held  to  create  a 
contract  between  the  company  and  any  employee  or  other  persons,  or  vest  in  him 
or  any  of  them  any  interest  prior  to  or  other  than  an  actual  award  of  benefits,  or 
to  confer  upon  any  such  employee  a  right  to  be  retained  in  the  service  of  the  com 
pany,  or  to  oblige  the  company  to  continue  the  relief  department  or  the  relief 
fund  by  making  further  contributions  thereto  for  the  benefit  of  persons  other  than 
those  to  whom  benefits  have  been  awarded:  provided,  that  no  such  discontinuance 
affects  the  company's  liability  as  regards  benefits  awarded  except  that  the  com- 
pany may  at  any  time  be  released  from  further  disability  thereunder  by  — 

(a)  Nominating  by  and  with  the  approval  of  the  judge  of  a  court  of  record  of 

County 

State   of of  competent  jurisdiction,  a  trustee 

for  the  relief  fund,  to  hold  and  administer  the  same  as  herein  provided  for  the 
benefits  of  all  persons  to  whom  benefits  are  awarded,  and  transfer  to  such  trustee 
funds  and  securities  at  least  in  value  to  all  benefits  awarded  and  then  in  force  as 

determined  by  the  actuary  of  the  State  insurance  department  of 

or  — 

(6)  Purchasing  annuities  for  all  persons  to  whom  such  benefits  are  awarded  and 
are  then  in  force  for  amounts  equal  to  such  benefits  and  payable  for  the  same 
respective  terms  from  a  life  insurance  company  licensed  to  do  business  in  the 
State. 

In  either  of  such  cases  the  remainder  of  the  relief  fund,  and  in  any  case  when 
valuation  discloses  a  surplus  of  that  fund  over  all  requirements,  the  surplus  of  the 
relief  fund,  is  distributed  equitably  among  its  then  members. 


1917.] 


HOUSE  — No.  1850. 


227 


Summary  of  Relief  Department.     Classes,  Dues  and  Benefits. 


CLASSES. 

Monthly  Wages. 

Monthly 
Dues. 

Weekly 
Disability. 

Benefits 
(Death).* 

Half  Rate  

Less  than  $30, 

$0  25 

$2  75 

$50 

1st  

$30  to  $45,      . 

50 

5  50 

100 

2nd  

$45  to  $60,      . 

75 

8  25 

125 

3rd  

$60  to  $75,      . 

1  00 

11  00 

150 

4th,     

$75  to  $95,      .         . 

1  25 

13  75 

150 

5th,     

$95  and  over, 

1  50 

16  50 

150 

FINANCIAL  STATEMENT  FOR  SEVENTH  FISCAL  YEAH,  ENDING  DEC.  31,  1913. 

Receipts. 


Balance  Jan.  1,  1913 

Contributions  from  members, 

Interest  on  surplus  in  treasurer's  hands, 


Disbursements. 


Sick  benefits, 
Accident  benefits, 
Death  benefits,     . 


As  provided  for  in  the  regulations,  Rule  No.  4,  the  company  paid 

all  operating  expenses,  as  follows :  — 
Salaries,  supplies  and  other  necessaries,  ...... 

Duplication  of  death  benefits,         ....... 

Total,  . 


$73,161  83 

49,649  87 

3,134  95 

$125,946  65 

$24,901  77 

16,654  60 

2,825  00 

$125,946  65 


$15,778  59 
2,825  00 

$18,603  59 


It  is  worth  while  to  compare  the  following  financial  statement  of  a 
small  employees'  benefit  association  which  has  only  one-fourth  as  many 
members  as  the  one  just  referred  to  having  plants  in  several  States:  — 


EMPLOYEES'    BENEFIT    ASSOCIATION    OF    A    CERTAIN    TYPE. 
BALANCE  SHEET,  DEC.  31,  1915. 


Assets. 
Investment  in  bonds  (at  cost) :  — 

$10,000  (par  value)  City  of  Omaha  Waterworks  4£%  gold  bonds,  . 
$5,000  (par  value),  Pittsburgh,  Cincinnati,  Chicago  &  St.   Louis 

Ry.  Co.  4|%  consolidated  gold  bonds,  series  1, 
$10,000  (par  value)  Chicago,  Milwaukee  &  St.  Paul  Ry.  Co.  refund- 
ing mortgage  gold  bonds,  series  A,  . 


$9,875  00 


5,056  25 


9,650  00 
$24,581  25 


»  The  company  voluntarily  and  as  a  free  gift  contributes  an  amount  equal  to  that  paid  as 
above,  by  the  relief  department,  in  the  event  of  death.  The  company,  however,  reserves  the 
right  to  discontinue  such  voluntary  contributions  at  any  time  it  may  deem  advisable. 


228 


SOCIAL  INSURANCE. 


[Feb. 


Cash:  — 

In  bank, $32,361  06 

In  hands  of  American  Steel  Foundries  (contributions  for 
the  last  half  of  December,  1915,  deducted  from  wages 
due  employees) ,  .......  2,403  15 


Accrued  interest  on  bonds, 


$34,764  21 
431  25 

$59,776  71 


Liabilities. 


Benefits  due,  not  paid :  — 
Death:  — 

Sickness,        ....... 

Accident,       ....... 

Total  death  benefits, 

Sickness,        ....... 

Accident,      ....... 

Total  benefits  due  —  not  paid, 

Doubtful  benefit  claims  made  but  not  yet  allowed :  — • 
Death:  — 

Sickness,        ....... 

Accident,       ....... 

Total  death  benefits, 

Sickness,  .          .          .          .          . 

Accident,  ....... 

Loss  of  eyesight, 


$6,590  00 
1,611  50 

$8,201  50 
1,554  43 

87  10 


$1,680  00 
2,780  00 

$4,460  00 

584  10 

45  60 

390  00 


$9,843  03 


Total  doubtful  benefits, 

Surplus :  — 

As  per  balance  sheet  of  Dec.  31,  1914,  .          .  $36,385  76 

Net  income  for  the  year  1915,  per  income  and  expend- 
iture account,     ....  8,068  22 


5,479  70 


44,453  98 

$59,776  71 

EMPLOYEES'     BENEFIT     ASSOCIATION     IN     A     COMPANY    HAVING 
PLANTS   IN   SEVERAL   DIFFERENT   STATES. 

STATEMENT -OF  OPERATIONS  FOR  THE  YEAR  1915. 
Revenue:  — 
Contributions  by  members,   . 


Interest  on  cash  balances,  etc., 

Expenditures:  — 

Benefits  allowed, 

Death  claims  due  to  sickness.  .  $89,787  40 

Death  claims  due  to  accident,          .  11,40081 

Death  benefits  only,      .          .          .  31,959  40 

*  Disability  claims  due  to  sickness,    .  $95,205  60 

Disability  claims  due  to  accident,   .  11,271  85 

Special  benefit,  claims,  . 


$286,409  65 
21,747  07 


$308,156  72 


$133,147  61 


$106,477  45 
1,520  65 

$241,145  71 


19i7J  HOUSE -No.  1850. 

Administration  expense:  —  ^ 

Salaries,       .  *  ^41°  97 
Printing  and  stationery,  l<*1 

Traveling  expenses,       .  ^ 

Office  furniture  and  fixtures,  1"^  *° 

Miscellaneous, 

$18,816  63 

Salarie^ndTxpenses,  .          .  1WJJ>9  40 

Hospital  and  medical,  . 

Auotomobile  maintenance,     .          .       ^ •  $46,136  06 

____J $287,281  77 


.      $20,874  95 

Net  income  from  operations,  50,000  00 

Contribution  of  International  Harvester  Companies,          .          .          - 
Since available  for  disability  and  mortality  fluctuations  Dec.  31,     ^  ^  ^ 
1914, 

$487,101  44 

150,000  00 

Deduct  increase  in  reserve  for  impaired  __ 

Balance  available  for  disability  and  mortality  fluctuations  Dec.  31, 
1915, 

FINANCIAL  STATEMENT  DEC.  31,  1915. 


Investments:—  $135,97000 

Bonds,          .  44,000  00 

Farm  loans,  __    $179,970  00 

2,462  49 

Accrued  interest  on  investments,  436,508  76 

Cash,  .  ' 

$018,941  25 

Liabilities. 

$25,221  57 
Death  claims  pending  settlement,  .  6  Qig  ^ 


50,00000 
ring  prior  to  and  continuing  after  Jan.  1,  1.  ^^  ^ 

Reserve  for  impaired  risks,    .  -    $281,839  81 

Balance  available  for  disability  and  mortality  fluctuations,  Dee.  31,     ^^  ^ 

1915,        .  —  -  — 

$618,941  25 

'  » 

Death  claims  pending  settlement:- 


.—  « 

32  on  which  there  is  a  liability  of  . 


230 


SOCIAL  INSURANCE. 


[Feb. 


Accounts  payable:  — 

Disability  and  death  benefits  allowed,  but  not  paid,  as  members  and 

beneficiaries  cannot  be  located,         .          .          .  $4,955  23 

Unclaimed  checks,         .          .  456  36 

Miscellaneous,      .          .          .          .          .          ...  1,206  65 


Reserve  for  continuing  benefits:  — 

On  Dec.  31,  1914,  a  reserve  of  $50,000  was  provided  to  pay  benefits  to 
1C6  members  disabled  at  that  time,  whose  disability  continued 
into  1915;  also  to  pay  benefits  on  claims  made  after  Jan.  1,  1915, 
for  disabilities  occurring  during  1914.     The  above  amount  was 
all  used  during  1915  for  the  purpose  stated  above.    On  Dec.  31, 
1915,  207  members  were  disabled  on  account  of  accident  and 
sickness,  and  the  association  may  reasonably  anticipate  that  as 
large  a  sum  will  be  required  to  meet  these  liabilities  in  1916: 
therefore  the  amount  of  $50,000  is  again  provided  to  liquidate 
such  liabilities,       ...... 

Reserve  for  impaired  risks:  — 

Balance  Dec.  31,  1914 $50,000  00 

Add  provision  for  1915 150,000  00 


$6,618  24 


50,000  00 


200,000  00 


$281,839  81 


SICKNESS  DISABILITY  BENEFITS. 


The  total  number  of  cases  of  sickness  reported  among  the  members  of  the  associa- 
tion during  1915  was  1,931,  of  which  number  1,849  drew  sickness  disability  benefits. 
In  the  other  82  cases  death  occurred  within  seven  days  of  the  date  of  disability. 

The  number  of  cases  reported  in  1914  but  carried  into  1915  was  155.  Of  the 
total  number  of  2,086  sickness  cases,  150  died  and  194  were  still  disabled  Dec.  31, 
1915. 

The  average  length  of  disability  due  to  sickness  (not  including  the  first  seven 
days)  was  thirty-six  days,  and  the  average  amount  of  each  disability  claim  was 
$47.51. 

During  the  year  78  members  drew  sickness  benefits  for  fifty-two  weeks,  110 
members  drew  benefits  for  six  months  or  more  but  less  than  twelve  months,  and 
92  members  drew  benefits  for  three  months  or  more  but  less  than  six  months. 

The  total  time  paid  for  on  account  of  sickness  (exclusive  of  the  first  seven  days) 
was  72,148  days. 

The  sickness  disability  cases  are  in  the  proportion  of  8.5  per  100  members. 

The  average  time  paid  for,  distributed  over  the  entire  membership  (22,755),  was 
3.17  days  per  member.  These  figures  do  not  take  into  consideration  the  first 
seven  days  of  sickness  disability  for  which  no  benefits  were  paid. 


ACCIDENT  DISABILITY  BENEFITS. 

The  total  number  of  accident  cases  reported  among  the  members  ol  the  associa- 
tion during  1915  was  471,  of  which  number  463  drew  accident  disability  benefits. 
In  the  other  8  cases  death  was  immediate."  The  number  of  cases  reported  in  1914 
but  carried  Into  1915  was  11.  Of  the  total  number  of  482  accident  cases  12  died 
and  13  were  still  disabled  Dec.  31,  1915. 

The  average  length  of  disability  due  to  all  accidents  was  15.5  days,  and  the 
average  amount  of  each  disability  claim  was  $23.78. 

The  total  time  paid  for  on  account  of  accidents  was  7,354  days. 


1917.1 


HOUSE  — No.  1850. 


231 


SPECIAL  BENEFITS. 
The  following  special  benefit  claims  were  allowed  during  the  year  1915:  — 


Deering,  loss  of  right  eye, 
McCormick,  loss  of  sight  of  both  eyes, 
amputation  of  right  foot, 


$355  65 
1,169  00 
1,080  00 

$2,604  65 


DEATH  BENEFITS. 


The  death  rate  due  to  sickness  during  the  year,  based  on  the  average  member- 
ship of  22,755,  was  6.59  per  1,000  members. 

The  death  rate  due  to  accidents  during  the  year,  based  on  the  average  member- 
ship of  22,755,  was  5.27  per  10,000  members. 

The  death  rate  from  all  causes  during  the  year,  based  on  the  average  member- 
ship of  22,755,  was  7.12  per  1,000  members. 


COMPARATIVE  TABLE. 


1911. 

1912. 

1913. 

1914. 

1915. 

Average  membership, 

29,546 

29,257 

30,125 

24,878 

22,755 

Percentage  of  employees  in  mem- 

75.1 

74.8 

75.7 

79.5 

78.4 

bership. 

Percentage    of    membership    in 

84.0 

85.0 

85.3 

90.9 

89.0 

manufacturing  plants. 

Number  of  sickness  cases  in  the 

3,550 

3,553 

3,700 

2,321 

1,849 

year. 

Average  length  of  sickness  dis- 

22.6 

24.44 

26.7 

33.89 

36.0 

ability  per  case  (days). 

Average  amount  of  sickness  ben- 

$29 68 

$30  45 

$35  51 

$43  90 

$47  51 

efits  per  case. 

Sickness  disability  cases  per  100 

12.1 

12.3 

12.5 

9.6 

8.5 

members. 

Total  days  paid  for  on  account  of 

87,084 

93,821 

104,506 

86,286 

72,148 

sickness. 

Number  of  accident  cases  in  the 

643 

676 

725 

563 

463 

year. 
Average  length  of  disability  on 

11.9 

13.6 

13.3 

13.6 

15.5 

fa  account  of  accident,  per  case 

PMdays). 

Average  amount  of  accident  ben- 

$16.97 

$17.36 

$18.43 

$18.90 

$23.78 

efits  per  case. 

Total  days  paid  for  on  account  of 

7,983 

9,432 

9,770 

7,803 

7,354 

accidents. 

Number  of  death  claims  paid  and 

179 

177 

199 

163 

162 

allowed. 

Death  rate  per  1,000  members,   . 

6.66 

5.47 

6.54 

6.39 

7.12 

Total  benefits       .... 

$265,265  03 

$263,562  70 

$310,524  74 

$249,063  66 

$241,145  71 

Total  expenses,    .... 

$41,364  86 

$47,240  60 

$51,997  61 

$49,450  04 

$46,136  06 

Balance  available  for  disability 

$241,859  36 

$326,940  48 

$344,779  71 

$416,226  49 

$337,101  44 

and  mortality  fluctuations. 

(a)  The  reduction  of  forces  in  the  works  due  to  the  curtailment  of  export  trade 
resulting  from  the  war  in  Europe  has  materially  affected  the  membership  of  the 
association,  so  that  the  average  for  the  year  1915  was  22,755  as  compared  with 
24,878  for  the  year  1914. 

(6)  Members  who  were  laid  off  on  account  of  the  unusual  situation  were  allowed 
to  continue  their  memberships  in  full  force  during  extended  absence,  as  authorized 
by  the  board  of  trustees. 


232  SOCIAL  INSURANCE.  [Feb. 

(c)  The  board  of  trustees  carefully  considered  the  subject  of  reserve  fund  for 
impaired  risks,  and  believing  the  amount  of  $50,000  inadequate,  unanimously 
voted  to  increase  this  reserve  to  $200,000,  and  to  invest  the  fund  in  approved 
interest-bearing  securities. 

The  campaign  against  tuberculosis  has  been  continued  in  co-operation  with 
the  companies.  During  the  year  78  new  cases  were  recorded,  56  of  which  received 
sanatorium  care.  The  record  of  the  56  sanatorium  cases  is  as  follows :  — 

Died  at  sanatorium,  ..........       5 

Left  sanatorium  and  died,  ....  .4 

Lump  sum  settlement,        ..........       1 

Left  sanatorium  and  drew  fifty-two  weeks'  benefits,      .....       5 

Recovered  and  returned  to  work,         ........      14 

Still  disabled  at  sanatorium,        .......  .20 

Left  sanatorium,  but  still  disabled,      ........       7 

56 
The  record  of  the  22  cases  which  did  not  receive  sanatorium  care  is  as  follows:  — 

Died 1 

Lump  sum  settlements,      ..........  3 

Recovered  and  returned  to  work,         ........  5 

Still  disabled, 13 

22 
The  following  balance  sheet  of  this  association  for  the  year  1915  is  of  interest:  — 

BALANCE  SHEET. 

Assets. 

It  will  be  noted  that  there  was  invested  in  bonds  $24,581.25,  and  there  was  at 
the  credit  of  the  association  in  the  bank  as  of  Dec.  31,  1915,  $32,361.06,  and  that 
an  additional  sum  of  $2,403.15  was  in  the  hands  of  the  American  Steel  Foundries 
on  that  date.  The  latter  amount  represents  contributions  which  were  not  col- 
lected at  the  time  the  account  books  of  the  association  were  closed.  As  soon  as 
an  accounting  could  be  made  by  the  company  of  these  collections  the  money  was 
turned  over  to  the  association  and  deposited  to  the  credit  of  its  account  in  the 
bank. 

Liabilities. 

The  total  liabilities  of  the  association  as  of  Dec.  31,  1915,  were  $15,322.73,  as 
follows:  — 

Benefits  due,  not  paid,  $9,843.03.  This  amount  represents  claims  which  had 
accrued  for  the  second  biweekly  period  of  December,  and  were  paid  shortly  after 
the  1st  of  January,  1916,  together  with  a  number  of  death  claims,  payment  of 
which  was  withheld  pending  receipt  of  proper  claim  papers. 

Doubtful  benefit  claims  made,  but  not  yet  allowed,  $5,479.70.  This  item  repre- 
sents the  association's  responsibility  for  several  claims,  payment  of  which  had  not 
been  definitely  decided. 

Surplus. 

Of  the  net  income  for  the  year  the  portion  derived  from  contributions  was 
$6,580.64,  or  15.5  per  cent,  of  the  total  contributions  for  the  year,  which  compares 
with  corresponding  income  for  previous  years  or  periods  as  follows :  — 


191 7.]  HOUSE  —  Xo.  1850.  233 


Percentage  of  Income  to  Contributions.  per  Cgnt 

Period,  Sept.  1,  1911,  to  Dec.  31,  1912,  .          .  .  .32.1 

Year,  Jan.  1,  1913,  to  Dec.  31,  1913, 18.0 

Year,  Jan.  1,  1914,  to  Dec.  31,  1914, 13.3 

Year,  Jan.  1,  1915,  to  Dec.  31,  1915, 15.5 

Average  for  total  period,          .          .          .          .          .          .          .          .20.5 

The  percentage  of  gain  from  contributions  was  slightly  in  excess  of  1914,  although 
the  total  of  contributions  for  the  year  was  less.  This  is  accounted  for  by  the  fact 
that  the  average  contribution  per  member  was  approximately  31  cents  more  than 
in  1914,  and  those  receiving  sick  benefits  were,  on  an  average,  members  of  lower 
class  rating;  also  the  amount  of  special  benefits  paid  was  about  $1,300  less  than 
in  the  preceding  year. 

GENERAL. 

The  association's  contribution  rate  contemplated  5  deaths  per  1,000  members 
per  year.  The  average  rate  during  the  present  fiscal  period  was  7.26  deaths  per 
year. 

The  amount  of  the  contribution  charged  for  protection  by  the  association  was 
fixed  on  a  probable  absence  from  work  by  each  member  of  four  days  per  year  in 
excess  of  the  first  weekly  period.  During  the  fiscal  period  covered  by  this  report 
only  3.02  days  per  member  were  lost  on  account  of  disability. 

During  the  year  1915  the  association  paid  benefits  as  follows:  — 

Claims  for  sickness,       .          .          .          .          .          .          .          .          .          .         456 

Claims  for  accidents,     ............  25 

Claims  for  death,  27 


Total 508 

The  average  amount  of  each  claim  for  sickness  was  ....  $29 . 80 

The  average  amount  of  each  claim  for  accident  was  .          .          .          .47.40 

The  average  amount  of  each  claim  for  death  was      .          .          .         ' .  780 . 00 


Company's  Contribution. 

It  may  be  of  particular  interest  to  know  that  during  the  twelve  months  ending 
Dec.  31,  1915,  the  company  disbursed,  on  account  of  actual  out-of-pocket  expenses 
for  managing  the  affairs  of  the  association,  $9,911.89.  This  amount  does  not  include 
salaries  of  the  employees  of  the  accounting  department,  either  at  the  Chicago 
office  or  at  the  plants,  who  have  contributed  largely  to  the  work  of  the  association ; 
nor  any  charges  for  rent,  stationery  and  many  other  miscellaneous  expenses. 

If  these  items  had  been  included  the  total  expense  to  the  company  would  have 
amounted  to  a  much  larger  sum. 

Except  for  the  sum  of  $78.36  for  special  expenses  incurred  in  the  interest  of  the 
association,  possibly  to  avoid  payment  of  large  disability  or  death  claims,  all  of 
the  money  disbursed  and  shown  on  the  financial  statement  was  spent  on  account 
of  claims. 

The  following  tables  show  rates  of  contribution  and  benefits  in  two 
establishment  funds,  representing  the  only  fundamental  points  of  dif- 
ference as  compared  with  the  funds  of  associations  already  discussed :  — 


234 


SOCIAL  INSURANCE. 


[Feb. 


Schedule  of  Contributions  and  Benefits  of  the  Employees'  Benefit  Associ- 
ation of  about  5,000  Members. 

(Monthly  earnings  of  members  govern  the  highest  class  they  may  enter.] 


NUM- 
BER OF 
CLASS. 

Monthly  Earnings. 

Monthly  Contribu-  1 
tions. 

Daily  Accident  and 
Sick  Benefit  (ex- 
cept Sunday). 

Death  Benefit  Sick- 
ness. 

Accidental  Death 
Benefit. 

8 

I8 

Loss  of  Two  Hands 
or  Two  Feet. 

F 

Irrevocable  Loss  of 
Sight  of  Two  Eyes. 

1,  .    . 

$20  00 

$0  30 

$0  40 

$240 

$480 

$240 

$480 

$120 

S480 

2,  . 

25  00 

38 

50 

300 

600 

300 

600 

150 

600 

3,  . 

30  00 

46 

60 

360 

720 

360 

720 

180 

720 

4,  . 

35  00 

54 

70 

420 

840 

420 

840 

210 

840 

5,  . 

40  00 

60 

80 

480 

960 

480 

960 

240 

960 

6,  . 

45  00 

68 

90 

540 

1,080 

540 

1,080 

270 

1,080 

7,  . 

50  00 

76 

1  00 

600 

1,200 

600 

1,200 

300 

1,200 

8,  . 

55  00 

84 

1  10 

660 

1,320 

660 

1,320 

330 

1,320 

9,  . 

60  00 

90 

1  20 

720 

1,440 

720 

1,440 

360 

1,440 

10,  . 

65  00 

98 

1  30 

780 

1,500 

780 

1,560 

390 

1,560 

11,  . 

70  00 

1  06 

1  40 

840 

1,680 

420 

1,680 

420 

1,680 

12,  . 

75  00 

1  14 

1  50 

900 

1,800 

900 

1,800 

450 

1,300 

13,  .    . 

'  8000 

1  20 

1  60 

960 

1,920 

960 

1,920 

480 

1,920 

14,  . 

85  00 

1  28 

1  70 

1,020 

2,040 

1,020 

2,040 

510 

2,040 

15,  . 

90  00 

1  36 

1  80 

1,080 

2,160 

1,080 

2,160 

540 

2,160 

16,  . 

95  00 

1  44 

1  90 

1,140 

2,280 

1,140 

2,280 

570 

2,280 

17,  . 

100  00 

1  50 

2  00 

1,200 

2,400 

1,200 

2,400 

600 

2,400 

18,  . 

125  00 

1  88 

2  50 

1,500 

3,000 

1,500 

3,000 

750 

3,000 

19,  . 

150  00 

2  26 

3  00 

1,800. 

3,600 

1,800 

3,600 

900 

3,600 

20,  . 

166  66 

2  50 

3  33 

2,000 

4,000  1   2,000 

4,000 

1,000 

4,000 

Monthly  contributions  are  based  on  1J^  per  cent,  of  the  monthly  earnings. 


Wages  between  classes  may  be  included  in  the  next  highest  class,  e.g.,  if  average 
wages  amounted  to  $52  per  month,  applicant  for  membership  shall  be  entitled  to 
enter  the  association  under  Class  8,  or  at  the  rate  of  $55  per  month. 

Schedule  of  contributions  and  benefits  for  new  employees  forty-five  years  of  age 
and  over,. same  as  shown  above,  excepting  that  the  death  benefit  shall' be  only  $100. 

Schedule  of  contributions  for  death  benefits  only,  20  cents  per  month  for  each 
$100  of  death  benefit. 

The  following  table  of  an  employees'  benefit  association  shows  another  way  of 
classification  of  contributions  and  benefits :  — 


1917. 


HOUSE  —  No.  1850. 


235 


Schedule  of  Contributions  for  Members  under  Forty-five  Years  of  Age. 


1 

III! 

HI*  p 

WEEKLY  PAY  OF  EM- 

M 

.2 
02 

1 

ill 

PLOYEES  GOVERN- 

§ 

Q 

C"c!  W 

,-Jj    ^  &    <C    OJ& 

ING  HIGHEST  CLASS 
THEY  MAY  ENTER. 

1 

1 

a 

"o 

Ejj 

l°lll^s 

,2 
U 

*C 

3 

i 

•5  »"*  J8 

5  Sill's 

"o 
b 

1 

•3 

.s 

|W  o^, 

pplgl 

| 

i 

a 

• 

1 

3°  ill 

3«^|o  g 

* 

1 

V 

8 
pa 

goaf     1 

^  0^3  0  03  0 

(           1 

$0  15 

$3  00 

$200  00 

$40000 

$800  00 

I 

2 

20 

3  00 

400  00 

400  00 

800  00 

$13.50  and  under, 

3 

30 

4  50 

600  00 

600  00 

1,200  00 

4 

30 

6  00 

400  00 

400  00 

800  00 

5 

40 

600 

80000 

800  00 

1,600  00 

Over    $13.50    and    not 

6 

50 

9  00 

800  00 

800  00 

1,600  00 

over  $18. 

Over  $18  and  not  over 

7 

75 

13  50 

1,200  00 

1-,200  00 

2,400  00 

$30. 

Over  $30,     . 

8 

1  00 

18  00 

1,600  00 

1,600  00 

3,200  00 

Additional  death  benefits  (as  allowed  by  rules),  5  cents  per  week  for  each  $200. 

To  continue  membership  death  benefit  only  after  leaving  service  requires  three 
years'  service,  one  year's  membership,  five  days'  notice.  (See  Rule  25.)  Cost, 
5  cents  per  week  for  each  $200. 

In  case  of  accident,  weekly  benefit  for  one  hundred  and  four  weeks. 

In  case  of  sickness,  weekly  benefit  after  the  first  six  working  days  for  fifty-two 
weeks,  and  half  weekly  benefit  for  additional  fifty-two  wfieks. 

Reasonable  surgical  bills  will  be  allowed  in  accident  cases,  but  no  medical  or 
surgical  bills  will  be  allowed  in  cases  of  sickness. 

Schedule  of  contributions  for  members  forty-five  years  of  age  and  over, 
as  follows:  — 

Members  joining  between  the  ages  of  forty-five  and  fifty  years,  one  and  one-half 
times  above  contributions. 

Members  joining  between  the  ages  of  fifty  and  fifty-five  years,  one  and  four- 
fifths  times  above  contributions. 

Members  joining  between  the  ages  of  fifty-five  and  sixty  years,  two  and  three- 
tenths  times  above  contributions. 


The  following  analyses  of  three  different  employees'  benefit  associations 
in  three  different  cities  are  made  according  to  the  system  of  Dr.  B.  S. 
Warren  of  the  Federal  Health  Service. 

By  comparing  one  with  the  other  it  is  evident  that  even  with  the  form 
as  complete  as  this,  detailed  comparisons  of  the  different  establishment 
funds  leave  much  to  be  desired. 


236  SOCIAL  INSURANCE.  [Feb. 


INFORMATION  REGARDING  EMPLOYEES'  BENEFIT  FUNDS  AND  MEDICAL  RELIEF. 

1    Name  of  Company.  City,  Chicago,  State,  111. 

2.  Average  total  number  of  employees.     29035. 

3.  Average  total  number  of  employees  entitled  to  benefits  or  medical  relief  or  both    in  1914. 

22,755. 

4.  Total  number  of  employees  to  whom  sick  benefits  were  paid  for  sickness  or  non-industrial 

accident  during  1914. l     2,312. 

5.  Total  number  of  days  lost  on  account  of  sickness  or  non-industrial  accident,  as  shown  by 

the  records  of  benefit  association  or  medical  relief  system  during  1914. 2     79,502. 

6.  Average  number  of  days  lost  on  account  of  sickness  or  non-industrial  accident  per  SICK  or 

DISABLED  person  in  1914.     8,434. 

7.  Average  number  of  days  lost  on  account  of  sickness  or  of  non-industrial  accident  per 

EMPLOYEE  entitled  to  benefits  or  medical  relief  or  both  during  1914.     853. 
8    Rate  of  contribution  by  company  S50,000  annually,  and  by  employees;    Class  A,  1.75% 

wage;   Class  B,  1 . 50%  wage. 
9.  Character  of  benefits: 

(a)  Amount  paid  beneficiary  per  day  or  per  week  in  case  of  disability  from  sickness  or 

non-industrial  accident.     ^2  wage. 

(b)  Amount  paid  in  case  of  death  from  sickness  or  from  non-industrial  accident.     Sickness 

1  yr's  wage.     Accident  2  yr's  wage. 

(c)  Cost  per  employee  entitled  to  benefits  of  medical  relief  systems. 

(d)  Kind  of  medical  and  surgical  relief  provided.     None  except  Tb. 

OTHER  INFORMATION  DESIRED. 

Annual  or  other  reports,  financial  statements,  constitution,  by-laws,  rules  and  regulations, 
etc.,  relating  to  benefit  associations  of  employees  providing  sick  benefits,  and  to  medical  and 
hospital  relief  systems  maintained  for  employees. 

NAME  OF  ESTABLISHMENT 

ADDRESS Chicago 

NO.    OF    EMPLOYEES 29,035  in  1915 

NO.  OF   MEMBERS  OF  FUND 22,755 

CLASSES   OF   BENEFITS   PROVIDED Cash  Only 

A.     Membership. 

1.  Compulsory.     No. 

a.  Medical  examination. 

6.  For  all. 

c.  For  certain  classes. 

2.  Voluntary.     Yes. 

a.  Restrictions  on  entering  fund. 

(1)  Age.    Not  over  45.    Employees  over  4-5  on  passing  medical  examination  may,  on  approval 

of  Superintendent  be  members  except  that  the  death  benefit  shall  only  be  $100. 

(2)  Sex.     No. 

(3)  Occupation.     No. 

(4)  Medical  examination.     Yes. 

(5)  Personal  statement  as  to  health.     Yes. 

(6)  Length  of  employment.     9  months  only  in  disability  due  to  pregnancy. 

(7)  Initiation  fee.     No. 

(8)  Moral  conduct. 

b.  Restrictions  on  continuance  in  fund. 

(1)  Payment  of  dues.     Yes. 

(2)  Forfeit  membership  on  leaving  company.     Yes,  except  by  death. 

(a)  All  rights.     No. 

(b)  Retain  life  ins.     After  one  year's  membership. 

(3)  Moral  conduct. 


1  If  the  same  person  was  sick  more  than  one  time  during  the  year  for  which  benefits  were 
paid,  he  should  be  counted  as  two  or  more  persons  according  to  the  number  of  times  he  was  sick. 

1  This  can  be  computed  by  dividing  the  total  amount  paid  in  the  form  of  benefits  by  the 
amount  paid  for  each  day  of  sickness.  Please  state  whether  or  not  Sundays  are  included  in 
the  days  for  which  benefits  were  paid. 


1917.]  HOUSE  —  Xo.  1850.  237 


B.  Contributions. 

1.  Employers  total  per  year.     850,000  if  membership  75%  of  total  employees. 

a.  Amount  per  employee. 

b.  Per  cent  of  total  receipts. 

2.  Employees. 

a.  Amount.1     Class  A,  1.75%  wages.     Class  B,  1.50%  wages.     Semi-monthly. 

(1)  Initiation  fee.     No. 

(2)  Weekly. 

(3)  Semi-monthly. 

(4)  Yearly. 

b.  Proportion  of  wages. 2     See  A. 

3.  Exemptions  or  restrictions  in  payment  of  contributions. 

a.  By  employers. 

(1)  Conditioned  on  state  of  funds. 

(2)  Conditioned  on  per  cent  of  employees  who  are  members.     $25,000  if  membership  6% 

of  total  employees;    850,000  if  membership  is  more  than  75%  of  total  employees . 

b.  By  employees. 

(1)  When  fund  reaches  a  certain  total. 

(2)  When  fund  reaches  a  certain  per  capita  amount. 

(3)  During  sickness.     None. 

4.  Assessments  or  increased  contributions, 
o.  Employer. 

(1)  Death  assessments. 

(2)  Loans  in  case  of  deficit.     Yes. 
b.  Employees. 

(1)  Death  Assessment.     No. 

(2)  To  make  up  deficit.     No. 

5.  Collections  of  contributions. 

a.  Employer. 

(1)  Monthly  payments. 

(2)  Annual  payments.     850,000. 

b.  Employees. 

(1)  Deductions  from  payroll.     Fes. 

(2)  Collections  by  society.     Where  not  on  pay  roll. 

(a)  Fines  for  non-payment  of  dues.     No. 

(b)  Forfeiture  of  benefits  for  non-payment  of  dues.     Yes,  when  not  on  pay  roll . 

(c)  Forfeiture  of  membership  for  non-payment  of  dues. 


C.     Cash  Benefits  for  Sickness. » 

1 .  Amount  per  week.     J/£  wage  on  basis  of  last  60  days  pay. 

a.  Full  period.     52  weeks  in  any  consecutive  3  yrs. — after  which  death  benefits  only.     If 

recovered  may  be  admitted  as  new  member. 

b.  Extended  period.     No. 

2.  Period. 

o.  Full  benefit.     52  weeks  in  any  consecutive  3  yrs. "- —  after  which  death  benefits  only.     If 
recovered  may  be  admitted  as  new  member. 

(1)  Beginning  with  8th  day. 

(a)    When  are  limitations  removed? 

(2)  Ending  with  52  wks. 

(a)  Any  one  illness.     52  weeks  in  any  consecutive  3  yrs.  —  after  which  death  benefits 

only.     If  recovered  may  be  admitted  as  new  member. 
(6)   Any  one  36  months.     52  weeks  in  any  consecutive  3  yrs.  —  after   which  death 

benefits  only.     If  recovered  may  be  admitted  as  new  member. 

1  Class  A  all  not  in  class  B.     Class  B  all  employees  at  manufacturing  plants,  twine   mills, 
steel  mills,  mines  and  all  others  who  are  or  may  hereafter  become   entitled   to  benefits   under  any 
working  man's  compensation  act  or  the  company's  industrial  accident  plan. 

2  AU  with  salary  of  over  $2,000  assessed  on  $2,000  basis. 

3  When  a  member  receives  over  82,000,  benefits  cannot  exceed  rate  of  y^  of  $2,000. 


238  SOCIAL  INSURANCE.  [Feb. 

b.  Partial  benefit  (for  extended  period).     No. 

(1)  Beginning  with 

(a)  When  are  limitations  removed? 

(2)  Ending  with 

(a)  Any  one  illness. 

(b)  Any  one  12  months. 

c.  Limitations  to  a  certain  amount  within  given  period. 

3.  Special  restrictions. 

a.  Payment  of  dues. 

(1)  For  what  period  before  being  entitled  to  benefits.     At  once,  9  mos.  for  pregnancy, 

(2)  Prompt  payment. 

b.  Special  causes  of  disability. 

(1)  Accidents. 

(a)  Industrial.     Class  A. 

(b)  Non-industrial.     Class  A  &  B. 

(2)  Chronic  diseases. 

(3)  Venereal  diseases.     No. 

(4)  Use  of  liquor.     No. 

(5)  Maternity.     Yes,  after  9  months. 

c.  Evidence  of  illness. 

(1)  Certificate  of. 

(a)  Physician.     Yes,  of  assoc.  M.  D. 
(6)   Committee. 

(2)  Statement  of  applicant  for  benefit.     Yes. 

(3)  Provisions  as  to. 

(o)  Other  employment  during  disability.     A'o. 
(6)   Confinement  to  home.     No. 

4.  Extensions.     No. 

a.  By  special  action  in  individual  cases. 

6.  To  individuals  prevented  from  coming  to  work  by  quarantine  of  others. 
5._In  case  of  death.     Sickness  1  yr.'s  average  wage.     Accident  2  yr.'s  average  wage. 

a.  Cash  payment  of. l 

b.  Restrictions. 

D.     Medical  Benefits. 

1.  Character  of  medical  and  surgical  relief  and  method  of  payment.     Physical  exam.  only, 
a.  Fund  physician.     Yes. 

(1)  Salary.     Fes. 

(2)  Fee:   Per  capita.     Per  visit. 

lb.  Company  physician.     Member  medical  and  hospital  relief  for  Tb. 

(1)  Salary. 

(2)  Fee:   Per  capita.     Per  visit. 

c.  Family  physician. 

(1)  Fee:   Per  capita.     Per  visit. 

d.  Hospital  care. 

(1)  What  extra  charge. 

e.  Nursing. 

(1)  Visiting. 

(2)  Home. 

/.    Supplies  and  appliances. 

(1)  By  fund. 

(2)  By  company. 

2.  Period  during  which  medical  benefits  are  provided. 

a.  Length  in  12  months! 

b.  Extension  of  period. 

3.  Special  restrictions, 
a.  Payment  of  dues. 

(1)  For  what  period  before  being  entitled  to  benefits. 

(2)  Prompt  payment. 


1  Class  A  receives  death  benefits  for  all  accidents.     Class  B  receives  death  benefits  for  only  non- 
industrial. 


1917.]  HOUSE  —  No.  1850.  239 

b.  Special  causes  of  disability. 

(1)  Accidents. 

(a)   Industrial. 

(6)   Non-industrial. 

(2)  Chronic  diseases. 

(3)  Venereal  diseases. 

(4)  Use  of  liquor. 

(5)  Maternity. 
4.  Extensions. 

a.  By  special  action  in  individual  cases. 

6.  To  individuals  prevented  from  coming  to  work  by  quarantine  of  others. 

E.     Administration. 

1.  General  character  of  control.     Joint. 

a.  Cash  benefits.     Joint. 

b.  Medical  benefits;  joint;  by  employer;  by  employees. 

2.  Control  by  employer. 

a.  Method. 

b.  Do  employees  contribute  part  or  all  ? 

3.  Control  by  employees, 
o.  Method. 

b.  Does  employer  contribute  part  or  all  ? 

4.  Joint  control.     Fes,  32  Trustees. 

a.  Method.     Board  of  Trustees,  %  elected  by  members,  }/2  appointed  by   Company;    Pres.   of 

Co,  ex-officio  Chairman  and  entitled  to  vote. 

b.  Proportionate  contribution. 

5.  Are  whole-time  medical  officers  employed  ?      Yes. 

6.  Appeals:    Provision  for.     Fes. 

1915. 

Contribution  of  members .          .          .  $286,409  65 

Contribution  of  Company, 50,000  00 

Amount  in  Cash,  Bal,  etc.,      .                                                                                .          .  21,74?  07 


Expenditures  in  1915 $287,281  77 

Reserve  Dec.  81,  1915 150,000  00 

Balance  available  for  expenditure  December  31,  1915, 837,101  44 


At  McCormick  works  to  certify  disability  for  90,000  members  1  full  time  Asso.  physician  (mem- 
bers not  scattered). 

At  another  plant  one  physician  for  1,200  (members  widely  scattered). 


NAME  OF  ESTABLISHMENT .T 

ADDRESS Pittsburgh,  Pa 

,  NO.  OF  EMPLOYEES 22,000 1916 

NO.   OF   MEMBERS  OF   FUND L2.000 

CLASSES  OF  BENEFITS  PROVIDED Cash 

A.     Membership. 

1.  Compulsory. 

o.  Medical  examination. 

b.  For  all. 

c.  For  certain  classes. 

2.  Voluntary.     Yes. 

a.  Restrictions  on  entering  fund.     Employees. 

(1)  Age.     50. 

(2)  Sex.     No. 

(3)  Occupation.     No. 

(4)  Medical  Examination.     Fes. 

(5)  Personal  statement  as  to  health.     Yes. 

(6)  Length  of  employment.     No. 

(7)  Initiation  Fee.     No. 

(8)  Moral  conduct.     No. 


240  SOCIAL  INSURANCE.  [Feb. 

b.  Restrictions  on  continuance  in  fund. 

(1)  Payment  of  dues.     Deducted  from  payroll. 

(2)  Forfeit  membership  on  leaving  company.     Yes. 

(a)  All  rights.     Yes. 

(b)  Retain  life  ins.     .Vo. 

(3)  Moral  conduct.     Yes. 

B.  Contributions. 

1.  Employer's  total  per  year. 

a.  Amount  per  employee. 

b.  Per  cent  of  total  receipts. 

2.  Employees.     .25,  .50,  .75,  $1.00,  Sl.25,  SI. 50,  per  month,  according  to  class. 

a.  Amount. 

(1)  Initiation  fee. 

(2)  Weekly. 

(3)  Monthly.     .25,  .50,  .75,  SI. 00,  SI. 25,  SI. 50,  per  month,  according  to  class 

(4)  Yearly. 

b.  Proportion  of  wages. 

3.  Exemptions  or  restrictions  in  payment  of  contributions. 

a.  By  employers. 

(1)  Conditioned  on  state  of  funds. 

(2)  Conditioned  on  per  cent  of  employees  who  are  members. 

b.  By  employees. 

(1)  When  fund  reaches  a  certain  total. 

(2)  When  fund  reaches  a  certain  per  capita  amount. 

(3)  During  sickness. 

4.  Assessments  or  increased  contributions. 

a.  Employer. 

(1)  Death  assessments. 

(2)  Loans  in  case  of  deficit. 

b.  Employees. 

(1)  Death  Assessment. 

(2)  To  make  up  deficit. 

5.  Collections  of  contributions. 

a.  Employer. 

(1)  Monthly  payments. 

(2)  Annual  payments. 

b.  Employees. 

(1)  Deductions  from  payroll.     Yes.     . 

(2)  Collections  by  society. 

(a)   Fines  for  non-payment  of  dues. 

(6)   Forfeiture  of  benefits  for  non-payment  of  dues.      Ye*. 

(c)  Forfeiture  of  membership  for  non-payment  of  dues.     2  Mos. 


C.     Cash  Benefits  for  Sickness. 

1.  Amount  per  week.     82.75,  S5.50  $8.25,  $11.00,  S13.75  and  S1G.50. 

a.  Full  period.     During  disability  or  until  service  pension  granted. 

b.  Extended  period. 

2.  Period. 

o.  Full  benefit. 

(1)  Beginning  with 

(a)  When  are  limitations  removed? 

(2)  Ending  with 

(a)  Any  one  illness. 

(b)  Any  one  12  months. 

b.  Partial  benefit  (for  extended  period). 

(1)  Beginning  with 

(a)  When  are  limitations  removed? 

(2)  Ending  with 

(o)  Any  one  illness. 
(6)  Any  one  12  months. 

c.  Limitations  to  a  certain  amount  within  given  period. 


1917.]  HOUSE  —  No.  1850.  241 

3.  Special  restriction*. 

Payment  of  dues. 

(1)  For  what  period  before  being  entitled  to  benefits. 

(2)  Prompt  payment. 

b    Special  causes  of  disability. 

(1)  Accidents. 

(a)  Industrial. 

(b)  Non-industrial.      Fes. 

(2)  Chronic  diseases.     No. 

(3)  Venereal  diseases.     No. 

(4)  Use  of  liquor.     No. 

(5)  Maternity. 

c.   Evidence  of  illness.      Yes. 

(1)  Certificate  of      • 

(a)  Physician.      Fes,  if  requested. 

(b)  Committee. 

(2)  Statement  of   applicant  for  benefit.      Fes. 

(3)  Provisions  as  to 

(a)  Other  employment  during  disability. 

(b)  Confinement  to  home. 

4.  Extensions. 

a.  By  special  action  in  individual  cases. 

b.  To  individuals  prevented  from  coming  to  work  by  quarantine  ot  others. 

5.  In  case  of  death.     SoO,  S100,  S12o,  $150. 

a.  Cash  payment  of. 

b.  Restrictions. 

D.     Medical  Benefit*. ' 

1.  Character  of  medical  and  surgical  relief  and  method  ot  payment. 

a.  Fund  physician.      Fes. 

(1)  Salary. 

(2)  Fee:    Per  capita.     Per  visit. 

b.  Company  physician. 

(1)  Salary. 

(2)  Fee:    Per  capita.     Per  visit. 

c.  Family  physician. 

(1)  Fee:    Per  capita.     Per  visit. 

d.  Hospital  care. 

(1)  What  extra  charge. 

e.  Nursing. 

(1)  Visiting. 

(2)  Home. 

/.    Supplies  and  appliances. 

(1)  By  fund.  _    - 

(2)  By  company. 

2.  Period  during  which  medical  benefits  ar«  provided. 

a.  Length  in  12  months. 
6.  Extension  of  period. 

3.  Special  restrictions, 
o.  Payment  of  dues. 

(1)  For  what  period  before  being  entitled  to  benefits. 

(2)  Prompt  payment. 

b.  Special  causes  of  disability. 

(1)  Accidents. 

(a)  Industrial. 

(b)  Non-industrial. 

(2)  Chronic  diseases. 

(3)  Venereal  diseases. 

(4)  Use  of  liquor. 

(5)  Maternity. 

4.  Extensions. 

a.  By  special  action  in  individual  cases. 

6.   To  individuals  prevented  from  coming  to  work  by  quarantine  of  otheis. 

1   None. 


242  SOCIAL  INSURANCE.  [Feb. 


E .     A  dministratio  n . 

1.  General  character  of  control. 

a.  Cash  benefits;  joint;  by  employer;  by  employees. 

b.  Medical  benefits;  joint;  by  employer;  by  employees. 

2.  Control  by  employer.     Yes. 

a.  Method.     Superintendent  in  charge  chosen  by  the  president  of  company.     Advisory  com- 

mittee:  J^  selected  by  members,  yz  appointed  by  company. 

b.  Do  employees  contribute  part  or  all  ? 

3.  Control  by  employees. 
o.  Method. 

b.  Does  employer  contribute  part  or  all  ? 

4.  Joint  control, 
a.  Method. 

b.  Proportionate  contribution. 

5.  Are  whole  time  medical  officers  employed  ?      Yes. 

6.  Appeals:    Provisions  for. 


INFORMATION  KEGARDING  EMPLOYEES'  BENEFIT  FUNDS  AND  MEDICAL  RELIEF. 

1.  Name  of  Company.  City,  Chicago,  State,  III. 

2.  Average  total  number  of  employees.     6,757. 

Z.  Average  total  number  of  employees  entitled  to  benefits  or  medical  relief  or  both  in  1914. 
5,473. 

4.  Total  number  of  employees  to  whom  sick  benefits  were  paid  for  sickness  or  non-industrial 

accident  during  1914.1     508. 

5.  Total  number  of  days  lost  on  account  of  sickness  or  non-industrial  accident,  as  shown  by 

the  records  of  benefit  association  or  medical  relief  system  during  1914. 2     11,816. 

6.  Average  number  of  days  lost  on  account  of  sickness  or  non-industrial  accident  per  SICK 

or  DISABLED  person  in  1914.     28.26. 

7.  Average  number  of  days  lost  on  account  of  sickness  or  of  non-industrial  accident  per 

EMPLOYEE  entitled  to  benefits  or  medical  relief  or  both  during  1914.     2. 16. 

8.  Rate  of  contribution  by  company,  operating  expenses,  and  by  employees,  $0.30-92.50  per 

week. 

9.  Character  of  benefits: 

(o)  Amount  paid  beneficiary  per  day  in  case  of  disability  from  sickness  or  non-industrial 

accident.     $0.40-83.38. 
(6)   Amount  paid  in  case  of  death  from  sickness  or  from  non-industrial  accident.     Sickness 

1  year's  pay.     Accident  2  years'  pay. 

(c)  Cost  per  employee  entitled  to  benefits  of  medical  relief  systems. 

(d)  Kind  of  medical  and  surgical  relief  provided. 


OTHER  INFORMATION  DESIRED. 

Annual  or  other  reports,  financial  statements,  constitution,  by-laws,  rules  and  regulations, 
«tc.,  relating  to  benefit  associations  of  employees  providing  sick  benefits,  and  to  medical  and 
hospital  relief  systems  maintained  for  employees. 

NAME  OF  ESTABLISHMENT .  .*. 

ADDRESS Chicago 

NO.  OF  EMPLOYEES 6,757 

NO.  OF  MEMBERS  OF  FUND 5,475 

CLASSES  OF  BENEFITS  PROVIDED Cash  Only 


1  If  the  same  person  was  sick  more  than  one  time  during  the  year  for  which  benefits  were 
paid,  he  should  be  counted  as  two  or  more  persons  according  to  the  number  of  times  he  was 
sick. 

*  This  can  be  computed  by  dividing  the  total  amount  paid  in  the  form  of  benefits  by  the 
amount  paid  for  each  day  of  sickness.  Please  state  whether  or  not  Sundays  are  included  in 
the  days  for  which  benefits  were  paid. 


1917.] 


HOUSE  — No.  1850. 


243 


A.  Membership. 

1.  Compulsory.     No. 

a.  Medical  examination. 

6.  For  all. 

c.   For  certain  classes. 

2.  Voluntary.     Yes. 

a.  Restriction  on  entering  fund. 

(1)  Age.     Not  over  55. 

(2)  Sex. 

(3)  Occupation. 

(4)  Medical  examination.     Yes. 

(5)  Personal  statement  as  to  health.     Yes. 

(6)  Length  "of  employment. 

(7)  Initiation  fee. 

(8)  Moral  conduct. 

b.  Restrictions  on  continuance  in  fund. 

(1)  Payment  of  dues.     Yes. 

(2)  Forfeit  membership  on  leaving  company. 

(a)  All  rights.     Except  death  benefits  if  a  member  for  one  year. 

(b)  Retain  life  ins. 

(3)  Moral  conduct. 

Classified  according  to  earning:  —  Classes  1  to  17  vary  from  $20  per  month  to  $100  per  month 
by  $5  a  class;  class  18,  $125  per  month;  class  19,  $150  per  month;  class  20,  $168. 

B.     Contributions. 

1.  Employer's  total  per  year.     Operating. 
.    o.  Amount  per  employee. 

6.  Per  cent  of  total  receipts. 

2.  Employees  $0.30-$2.50  a  class. * 

a.  Amount.     $0.30-$2.50  a  class. 

(1)  Initiation  fee.     No. 

(2)  Weekly.     No. 

(3)  Monthly.     $O.SO-$2.50  a  class. 

(4)  Yearly.     No. 

b.  Proportion  of  wages. 

3.  Exemptions  of  restrictions  in  payment  of  contributions. 

a.  By  employers. 

(1)  Conditioned  on  state  of  funds. 

(2)  Conditioned  on  per  cent  of  employees  who  are  members. 

b.  By  employees. 

(1)  When  fund  reaches  a  certain  total. 

(2)  When  fund  reaches  a  certain  per  capita  amount.         ^ 

(3)  During  sickness.     No. 

4.  Assessments  or  increased  contributions.     No. 

a.  Employer. 

(1)  Death  assessments.     No. 

(2)  Loans  in  case  of  deficit.     Yes. 

b.  Employees. 

(1)  Death  Assessment.     No. 

(2)  To  make  up  deficit.     No. 


i  m  A  cc                              Month's 
1  CLASS.                               Due 

CLASS.                            M&£'8 

1, 

SO  SO 

11, 

$1  06 

2,        .         .         . 

38 

12, 

1  U 

s',      '.      '. 

46 

13, 

1  20 

4 

64 

14, 

1  28 

&'. 

60 

15, 

1  36 

6, 

68 

16, 

1  44 

7 

76 

17, 

1  50 

8, 

84 

18, 

1  88 

9. 

90 

19, 

2  26 

10, 

98 

2G, 

2  50 

Classes  1  to  17  vary  from  $0.40  to  $2  per  day,  increasing  $0.10  per  day  according  to  class;  class 
18,  $2.50;  class  19,  SS;  class  20,  $3.33. 


244  SOCIAL  INSURANCE.  [Feb. 

5.  Collections  of  contributions. 

a.  Employer. 

(1)  Monthly  payments. 

(2)  Annual  payments. 

b.  Employees. 

(1)  Deductions  from  payroll.     Monthly. 

(2)  Collections  by  society.      When  nothing  due  on  payroll, 
(a)  Fines  for  non-payment  of  dues.     A'o. 

(6)   Forfeiture  of  benefits  for  non-payment  of  dues.     Yes. 
(c)   Forfeiture  of  membership  for  non-payment  of  dues.     No. 

C,     Cash  Benefits  for  Sickness. 

1.  Amount.     Per  working  day,  S0.40-S3.83. 

a.  Full  period.     In  any  52  weeks  consecutive,  after  \vhich  death  benefits  only.     If  recovered 

may  be  admitted  as  new  member. 

b.  Extended  period.     No. 

2.  Period. 

a.  Full  benefit.     52  weeks. 

(1)  Beginning  with  7th  working  day. 
(a)  When  are  limitations  removed? 

(2)  Ending  with  52d  week. 

(a)  Any  one  illness.     52  weeks  in  any  consecutive  ,  after  which  death 

benefits  only.     If  recovered  may  be  admitted  as  new  member. 

(b)  Any   one    12   months.     After   which   death   benefits   only.     If  recovered   may   be 

admitted  as  new  member. 

b.  Partial  benefit  (for  extended  period).     No. 

(1)  Beginning  with 

(a)  When  are  limitations  removed  ? 

(2)  Ending  with 

(a)  Any  one  illness. 

(b)  Any  one  12  months. 

c.  Limitations  to  a  certain  amount  within  given  period. 

3.  Special  restrictions. 

a.  Payment  of  dues.     If  no  wage  on  payroll. 

(1)  For  what  period  before  being  entitled  to  benefits.     At  once. 

(2)  Prompt  payment. 

b.  Special  causes  of  disability.     Yes. 

(1)  Accidents.     Yes. 

(a)  Industrial.     Yes,  unless  covered  by  State  law. 

(b)  Non-industrial.     Yes. 

(2)  Chronic  diseases.     No,  if  member  dies  within  six  months  after  joining. 

(3)  Venereal  diseases.     No. 

(4)  Use  of  liquor.     No. 

(5)  Maternity.     No. 

c.  Evidence  of  illness. 

(1)  Certificate  of. 

(a)  Physician.     Asso. 

(b)  Committee. 

(2)  Statement  of  applicant.     Yes,  for  benefit. 

(3)  Provisions  as  to. 

(a)  Other  employment  during  disability. 
(6)  Confinement  to  home. 

4.  Extensions. 

o.  By  special  action  in  individual  cases. 

b.  To  individuals  prevented  from  coming  to  work  by  quarantine  of  others. 

5.  In  case  of  death.     Sickness  1  year's  pay.     Accident  1  year's  pay.     Limit  on  wage  $2,000. 

a.  Cash  payment  of. 

b.  Restrictions.     Dis.,  etc. 


1917.]  HOUSE  — No.  1850.  245 


D.  Medical  Benefits. 

1.  Character  of  medical  and  surgical  relief  and  method  of  payment.     Physical  exam.  only, 
a.  Fund  physician.     Yes. 

(1)  Salary.     Yes. 

(2)  Fee:   Per  capita.     Per  visit, 
6.  Company  physician. 

(1)  Salary. 

(2)  Fee:   Per  capita.     Per  visit. 

c.  Family  physician. 

(1)  Fee:   Per  capita.     Per  visit. 

d.  Hospital  care. 

(1)  What  extra  charge. 
«.   Nursing. 

(1)  Visiting. 

(2)  Home. 

/.    Supplies  and  appliances. 

(1)  By  fund. 

(2)  By  company. 

2.  Period  during  which  medical  benefits  are  provided. 

a.  Length  in  12  months. 

b.  Extension  of  period. 

3.  Special  restrictions, 
o.  Payment  of  dues. 

(1)  For  what  period  before  being  entitled  to  benefits. 

(2)  Prompt  payment. 

6.  Special  causes  of  disability. 

(1)  Accidents. 

(a)  Industrial. 

(b)  Non-industrial. 

(2)  Chronic  diseases. 

(3)  Venereal  diseases. 

(4)  Use  of  liquor. 

(5)  Maternity. 
4.  Extensions. 

a.  By  special  action  in  individual  cases. 

6.  To  individuals  prevented  from  coming  to  work  by  quarantine  of  others. 

E.  Administration. 

1.  General  character  of  control.     Joint. 

a.  Cash  benefits.     Joint. 

b.  Medical  benefits;  joint;  by  employer;  by  employees.      ••" 

2.  Control  by  employer. 
o.  Method. 

b.  Do  employees  contribute  part  or  all? 

3.  Control  by  employees. 

6.  Does  employer  contribute  part  or  all? 

4.  Joint  control.     Yes,  20  Trustees. 

a.  Method.     Board  elected  %  by  members  and  %  appointed  by  Co.      Pres.  of  Co.  ex-officio 

chairman  and  entitled  to  note. 

b.  Proportionate  contribution. 

5.  Are  whole  time  medical  officers  employed?     Yes. 

6.  Appeals:   Provisions  for.     Yes. 

In  investigating  the  establishment  funds  of  the  middle  west,  one  com- 
mon factor  was  noted  in  all,  namely,  that  there  were  no  figures  available 
on  sickness  insurance.  The  reason  for  this  was  obvious.  Without  ex- 
ception, the  establishment  funds  were  managed  from  the  office  end  with 
a  minimum  clerical  force,  and  only  such  figures  as  were  absolutely  neces- 
sary from  this  point  of  view  were  on  file. 


246  SOCIAL  INSURANCE.  [Feb. 

Ample  material  for  valuable  tables  was  in  the  files  of  all  the  establish- 
ment funds,  but  not  in  such  form  as  to  be  of  any  practical  use. 

In  order  that  certain  figures  and  tables  on  sickness  insurance  might  be 
obtained,  Dr.  Warren  is  trying  to  make  arrangements  for  the  services  of 
additional  clerks,  at  the  expense  of  the  Federal  government,  to  tabulate 
much  of  this  material.  He  has  devised,  for  example,  a  3  by  5  inch  index 
card,  giving  the  following  information:  Serial  No.,  age,  sex,  native  or 
foreign  born,  color,  class  No.  or  weekly  wage  and  occupation,  as  well  as 
a  disability  record  of  sickness  and  non-industrial  accident,  which  gives 
the  date,  time  paid  for  and  diagnosis. 

If  this  plan  succeeds  within  a  year  we  shall  have  nearly  100,000  of  these 
cards  on  file  at  Dr.  Warren's  office  in  Washington. 

At  a  meeting  of  the  American  Public  Health  Association  in  Cincinnati, 
in  the  section  on  industrial  hygiene,  where  the  subject  of  social  insurance 
was  freely  discussed,  it  was  interesting  to  note  the  various  types  interested 
in  the  subject.  Besides  the  representatives  of  the  American  Association 
for  Labor  Legislation  there  were  present  practicing  physicians,  lay  and 
medical  representatives  of  local  boards  of  health,  industrial  physicians  and 
surgeons,  insurance  men,  economists,  statisticians,  actuaries,  business  men 
and  social  workers. 

It  was  apparently  the  sense  of  the  meeting  that  social  insurance  was 
coming  sooner  or  later,  and  that  health  insurance  was  the  most  logical 
form  to  consider  first.  A  majority  of  those  present  believed  in  the  principle 
of  social  insurance,  but  when  it  came  to  a  consideration  of  the  form, 
method  of  administration,  etc.,  there  were  wide  differences  in  opinion, 
and  many  suggestions  were  made,  some  of  doubtful  value  and  some  most 
unique.  .Only  one  man  advocated  social  insurance  as  an  emergency 
measure.  Some  believed  it  should  come  next  year;  some  in  two,  three  or 
five  years;  while  many  of  the  more  conservative  advocated  a  most  careful 
study  of  the  whole  situation,  and  what  it  would  mean  directly  and  in- 
directly, before  drafting  legislation,  especially  as  there  were  such  wide 
differences  of  opinion  as  to  the  estimated  cost. 

On  the  whole,  there  seemed  to  be  a  decidedly  conservative  attitude. 
Several  stated  frankly  in  the  informal  discussions  during  the  week  that 
when  social  insurance  did  come  they  would  like  to  see  it  in  some  other 
man's  State  first.  For  example,  a  very  keen  advocate  of  the  principle  in 
New  York  said  he  hoped  the  Massachusetts  Legislature  the  coming  year 
would  pass  a  bill  for  social  insurance.  When  asked  why  he  did  not 
advocate  one  for  the  New  York  Legislature,  he  replied  that  New  York 
would  be  in  a  better  position  to  introduce  a  bill  after  the  plan  had  been 
tried  out  in  Massachusetts  for  a  year  or  two,  and  that  his  Legislature  could 
profit  by  the  mistakes  of  the  Massachusetts  Legislature. 

Because  of  the  many  points  giving  rise  to  wide  differences  of  opinion 
among  the  interests  concerned,  several  advocated  the  introduction  of  a 
broad  general  bill,  which  would  allow  these  various  differences  of  opinion 
to  be  settled  later  as  administrative  details. 


1917.]  HOUSE  — No.  1850.  247 


, 


This  plan  did  not  meet  with  hearty  approval,  as  the  majority  considered 
administrative  details  under  these  conditions  to  be  dangerous  and  subject 
varied  methods  of  interpretation. 


DESCRIPTIVE  ACCOUNT  OF  NATIONAL  HEALTH  INSURANCE 
SYSTEMS  IN  FOREIGN  COUNTRIES. 

(Prepared  by  the  Massachusetts  Bureau  of  Statistics.) 

The  term  "health  insurance"  broadly  defined,  and  as  used  in  this 
report,  embraces  all  so-called  "sickness  insurance  systems"  or  "health 
insurance  systems"  whether  they  provide  merely  for  the  payment  of  cash 
benefits  in  case  of  sickness  or,  in  addition  thereto,  for  the  payment  of 
maternity  benefits,  accident  benefits  for  limited  periods  of  time,  and 
funeral  expenses,  and  for  the  furnishing  of  medical  attention,  nursing 
and  therapeutic  appliances. 

In  at  least  16  European  countries  systems  of  health  insurance  under 
governmental  supervision  and  regulation  have  been  established.  These 
countries  are  as  follows : 

Germany.  Luxemburg.  Netherlands.  Russia. 

United  Kingdom.  Norway.  Switzerland.  Belgium. 

Austria.  Servia.  France.  Denmark. 

Hungary.  Roumania.  Italy.  Sweden. 

In  all  of  these  countries  except  Belgium,  Denmark,  and  Sweden,  com- 
pulsory systems  have  been  established.  In  France,  Italy,  and  Russia, 
the  compulsory  features  apply  only  to  persons  employed  in  certain  specified 
occupations,  but  in  the  other  ten  countries  having  compulsory  systems 
all  wage-earners  and  salaried  employees  earning  annually  less  than  a 
stated  amount  (with  certain  exceptions)  are  required  to  insure.  The 
cost  of  insurance  in  each  of  the  13  countries  having  compulsory  insurance 
systems  is  met  by  joint  contributions,  but  the  proportions  borne  by  the 
employers,  the  employees  and  the  State  vary  greatly  in  the  several 
countries,  and  in  all  except  the  United  Kingdom  the  contributions  vary 
according  to  the  amount  of  wages  earned  by  the  insured  persons,  and  the 
benefits  granted  vary  according  to  their  contributions.  In  the  United 
Kingdom  uniform  contributions  are  made  by  all  persons  insured,  and 
uniform  benefits  are  granted  irrespective  of  their  earnings.  Ordinarily, 
district  or  trade  funds  under  mutual  management  are  established  as 
"insurance  carriers"  (in  connection  with  both  compulsory  and  voluntary 
insurance  systems)  and  in  nearly  all  of  the  countries  private  or  semi- 
official associations,  labor  organizations,  and  societies  are  also  authorized 
to  carry  health  insurance,  provided  they  meet  certain  requirements  made 
of  "approved  societies." 

In  Belgium,  Denmark,  and  Sweden  voluntary  health  insurance  systems 
under  government  supervision  have  been  established,  but  no  compulsory 


system  has  yet  been  established  in  these  countries.  In  several  of  the 
countries  having  compulsory  systems,  provision  is  also  made  for  volun- 
tary health  insurance,  and  in  connection  with  all  of  these  voluntary  sys- 
tems it  is  customary  for  the  government  to  grant  substantial  subsidies 
and  to  render  further  assistance  by  bearing  a  portion  of  the  expenses  of 
administration.  Experience  has  shown,  however,  that  in  no  country 
has  voluntary  health  insurance  appealed  to  any  large  percentage  of  the 
population,  and  that  the  very  persons  who  are  most  in  need  of  the  pro- 
tection afforded  by  such  insurance  are  usually  those  who  will  not,  volun- 
tarily, insure. 

In  the  following  paragraphs  of  this  report  the  health  insurance  systems 
in  the  several  countries  have  been  discussed  in  the  order  of  the  countries 
named  above.  The  compulsory  systems  have  received  first  consideration, 
except  where  a  country  may  have  both  a  compulsory  and  voluntary  sys- 
tem, in  which  case  both  have  been  discussed  in  connection  with  that 
country,  while  the  voluntary  subsidized  systems  in  Belgium,  Denmark, 
and  Sweden  have  received  later  consideration. 

Wherever  possible  the  original  sources  such  as  the  reports  of  the 
government  insurance  departments  and  other  official  reports  have  been 
consulted  in  order  to  ascertain  the  more  important  facts  concerning 
the  date  of  the  establishment  of  the  several  systems;  the  classes  of  the 
population  covered;  the  methods  of  administration;  the  cost  to  the  per- 
sons insured,  to  employers,  and  to  the  State;  and  other  important  data 
with  reference  to  the  operation  of  the  systems.  For  the  use  of  the 
Commission  an  extensive  bibliography,  both  on  old-age  pensions  and 
health  insurance,  was  prepared  by  the  Bureau  of  Statistics,  but  because 
of  limitations  of  time  and  space  it  has  not  been  found  advisable  by  the 
Commission  to  publish  it  in  connection  with  this  report. 

Germany.  A  comprehensive  system  of  social  insurance,  including  sickness, 
accident,  old-age  and  invalidity  insurance,  was  established  in  Germany  during 
the  period  1883-1889  by  a  series  of  acts,  of  which  that  relative  to  sickness  insurance 
passed  in  1883  was  the  first,  followed  in  1884  by  an  act  providing  for  accident 
insurance,  and  in  1889  by  an  act  providing  for  old-age  and  invalidity  insurance. 
These  acts,  with  later  amendments,  were  codified  into  a  single  social  insurance 
code  in  1911.  The  present  social  insurance  system  in  Germany  is  the  result,  there- 
fore, of  about  30  years  of  careful  experiment.  Each  feature  of  this  system  has 
been  developed  in  such  manner  as  to  best  correlate  it  with  the  others,  consequently 
no  single  feature  can  be  properly  discussed  without  some  reference  being  made  to 
those  with  which  it  is  intimately  related. 

Health  insurance  is  required  of  all  wage-earners  and  salaried  employees  whose 
annual  earnings  are  less  than  a  stated  amount.  Those  to  whom  the  compulsory 
features  of  the  law  do  not  apply,  may  voluntarily  insure,  subject  to  certain  provi- 
sions of  the  code.  Various  types  of  "sick  funds"  are  provided  for,  including 
"district  funds",  "establishment  funds",  "guild  sick  funds",  "miners' funds",  etc., 
but*the  "district  funds"  provide  insurance  for  a  majority  of  the  insured  persons. 

Premiums  are  paid  by  employers  and  employees,  two-thirds  of  the  cost  of  insur- 
ance being  borne  by  the  employee  and  one-third  by  the  employer,  except  in  the 
case  of  the  "guild  sick  funds"  toward  which  employers  and  employees  contribute 
equally.  The  government  contributes  only  to  the  extent  of  paying  certain  expenses 


1917.]  HOUSE  —  No.  1850.  249 

>f  supervision.  The  employer  is  held  responsible  for  the  total  amount  of  the 
premiums,  but  he  may  deduct  the  employee's  share  from  the  wages.  Payment 
by  the  employer  is  made  by  means  of  stamps  affixed  weekly  to  receipt  cards,  which 
the  insured  persons  are  required  to  possess,  except  that  under  certain  regulations 
the  employer  may  make  payment  directly  to  the  society  by  which  his  employees 
are  insured.  The  amount  of  the  premiums  and  the  cash  benefits  granted  are  cal- 
culated as  percentages  of  wages.  Certain  minimum  benefits  must  be  granted,  of 
which  the  principal  ones  are  medical  care,  partial  wages  during  illness,  maternity 
benefits,  and  funeral  benefits.  Hospital  care  may  be  given  as  a  substitute  for  home 
treatment.  Nearly  all  of  the  societies  furnish  more  than  the  minimum  benefits 
required  by  law. 

The  system  includes  all  forms  of  sickness  and  also  disability  for  13  weeks,  when 
such  disability  is  the  result  of  an  industrial  accident.  From  the  third  day  of  illness 
a  cash  benefit  of  50  per  cent  of  the  average  daily  wages  is  given  during  a  period  of 
26  weeks,  which  may  be  increased  to  75  per  cent  of  the  daily  wages,  and  payment 
may  be  extended  over  a  period  of  one  year.  Should  the  illness  continue  longer  than 
one  year,  the  case  is  cared  for  under  the  invalidity  insurance  laws.  One-half  of 
the  cash  allowance  may  be  paid  to  the  dependents  of  a  patient  in  certain  cases. 
In  addition  to  these  benefits  the  insurance  societies  provide  various  other  benefits. 
For  example,  medical  attention,  nursing,  and  hospital  care  are  often  continued 
during  convalescence  beyond  the  usual  period  of  26  weeks;  medicines  and  thera- 
peutic appliances  are  commonly  furnished;  operations  are  sometimes  paid  for; 
treatment  at  a  sanatorium  (especially  for  tubercular  cases)  is  frequently  provided; 
and  occasionally  dental  care  is  given. 

Insured  women  receive  as  maternity  benefits  cash  allowances  for  two  weeks 
before  and  six  weeks  after  delivery,  or  a  nursing  benefit  up  to  twelve  weeks  after 
confinement,  or  home  nursing,  or  hospital  care  with  one-half  the  cash  aid.  The 
societies  may  also  provide  similar  benefits  for  the  wives  of  insured  men.  Since 
the  war  the  German  government  has  considered  it  an  imperative  State  duty  to 
furnish  additional  benefits  for  the  wives  of  insured  men  serving  at  the  front.  By 
a  decree  of  December  3,  1914,  it  voted  2,000,000  marks  ($476,400)  a  month  to  be 
expended  for  maternity  benefits  of  25  marks  ($5.96)  to  meet  the  cost  of  childbirth; 
1  mark  ($0.238)  a  day  for  a  period  of  8  weeks,  of  which  6  weeks  at  least  must  be 
after  confinement;  10  marks  ($2.38)  for  additional  medical  care;  and  a  nursing 
allowance  of  %  mark  ($0.1191)  per  diem  for  12  weeks  to  breast-feeding  mothers. 
The  total  maximum  cost  of  these  grants  is  thus  raised  to  133  marks  ($31.68). 

Funeral  benefits  of  from  20  to  50  times  the  average  daily  wages  are  paid,  and 
provision  may  also  be  made  for  the  payment  of  such  benefits  in  the  case  of  de- 
pendents of  insured  persons.  A  minimum  of  50  marks  ($11.91)  is  fixed,  but  this 
amount  may  be  increased. 

Local  insurance  societies  and  other  organizations  not  operated  for  profit  are 
designated  as  "insurance  carriers".  Subject  to  the  supervision  of  the  Imperial 
Insurance  Office,  these  societies  are  administered  jointly  by  employer  and  employee, 
the  employees  having  two-thirds  of  the  voting  power  and  the  employer,  one- third. 

The  number  of  sickness  pensions  in  force  on  January  1,  1912,  was  11,569.  The 
total  amount  paid  as  pensions  on  account  of  sickness  during  the  year  was  3,201,735 
marks  ($762,653),  and  the  average  pension  was  207.46  marks  ($49.42).  The 
number  of  pensions  in  force  on  January  1,  1914,  was  16,555,  but  data  as  to  the 
amount  paid  were  not  available. 

Aside  from  the  beneficent  results  from  the  standpoint  of  individuals  aided,  the 
health  insurance  system  in  Germany  has  been  of  great  value  as  a  stimulus  to  the 
p  eventive  health  movement.  In  connection  with  the  administration  of  the  insur- 
ance system,  preventive  measures  have  been  adopted  and  taken  the  form  of  public 
lectures  on  avoidable  diseases,  of  educational  tracts  distributed  by  the  insurance 
authorities,  and  of  conferences  between  physicians  and  workpeople.  These 
measures  have  had  a  general  educational  effect  resulting  in  a  demand  for  better 


housing,  sanitation,  and  hygienic  living.  The  great  reduction  in  the  tuberculosis 
death  rate  during  the  last  two  decades  has  been  considered  by  authorities  to  be  a 
direct  result  of  the  establishment  of  the  health  insurance  system,  and  of  these  pre- 
ventive measures.  Similarly,  although  to  a  less  extent,  the  death  rates  from  other 
serious  diseases  have  decreased.  There  has  also  been  marked  improvement  in  the 
general  health  of  the  wage-earning  population,  which  is  recognized  to  be  an 
important  factor  in  the  military  activities  of  the  Empire. 

United  Kingdom.  The  British  Act  of  December  16,  1911,  established  com- 
pulsory sickness  insurance  for  all  working  people  between  the  ages  of  16  and  70. 
The  act  was  amended  on  August  15,  1913,  in  several  particulars,  namely:  certain 
exemptions  permissible;  the  abolition,  reduction  and  extension  of  certain  benefits; 
and  certain  minor  matters  of  administration.  The  act  was  subsequently  amended 
on  September  18,  1914,  November  27,  1914,  and  March  16,  1915,  in  regard  to  war 
compensations  and  reduction  of  benefits  in  the  case  of  persons  entitled  to  pensions 
for  total  disablement.  Under  the  British  system  invalidity  is  treated  as  part  of 
the  insurance  against  sickness.  The  British  law  also  holds  that,  if  an  avoidable 
and  curable  disease  occurs  too  frequently  in  any  place,  the  insurance  authorities 
may  be  permitted  to  recover  a  considerable  part  of  the  cost  occasioned  by  this 
excessive  sickness  from  the  local  authorities  or  from  the  employer  who  allowed 
conditions  to  exist  that  caused  this  particular  disease.  The  act  applies  to  all  sick- 
ness and  accidents  not  covered  by  any  other  law,  and  becomes  compulsory  for  wage- 
earners  whose  total  annual  income  is  less  than  £160  ($778.64).  Persons  already 
receiving  a  pension  or  income  of  £26  ($126.53)  or  more,  and  persons  wholly  de- 
pendent on  some  one  else,  are  exempt  from  the  law.  Except  for  the  first  six 
months  after  the  act  became  effective,  no  waiting  period  for  medical  aid  has  been 
established. 

The  benefits  granted  consist  of  a  provision  for  medical  treatment  and  attendance; 
the  supply  of  medicines  and  certain  prescribed  therapeutic  appliances;  and  treat- 
ment at  sanatoria  for  all  forms  of  tuberculosis.  Medical  aid  and  dental  care 
furnished  to  dependents  are  optional.  Free  choice  is  permitted  from  a  panel  of 
physicians,  but  other  arrangements  are  allowed  if  the  number  on  the  panel  is 
insufficient.  Remuneration  for  medical  service  is  arranged  by  the  insurance 
committees  according  to  official  regulations.  A  cash  benefit  is  granted  for  26 
weeks  from  the  first,  second,  or  third  day  after  the  commencement  of  the  disease 
or  incapacity.  If  the  illness  continues  beyond  this  period,  a  disablement  benefit 
of  5s.  ($1.22)  a  week  is  given;  but  the  right  to  the  disablement  and  money  benefits 
ceases  in  the  case  of  insured  persons  who  have  already  attained  the  age  of  70. 
Cash  aid  may  be  continued  during  convalescence  or  may  be  increased  for  persons 
who  have  children  dependent  upon  them;  or  may  be  granted  in  the  form  of  a  dis- 
ablement allowance  to  persons  not  totally  incapable  of  working,  or  of  an  allowance 
to  persons  who  cannot  attend  work  on  account  of  infectious  disease. 

The  ordinary  rate  of  sickness  benefit  is  10s.  ($2.43)  a  week  for  men,  and  7s.  6d. 
($1.82)  a  week  for  women,  throughout  the  whole  period  of  26  weeks.  In  the  case 
of  single  minors,  6s.  ($1.46)  a  week  is  granted  to  boys,  5s.  ($1.22)  a  week  to  girls, 
during  the  first  13  weeks,  while  boys  receive  5s.  ($1.22)  a  week,  and  girls  4s.  ($0.97) 
a  week,  during  the  second  13  weeks.  The  disablement  benefit  to  girls  is  4s.  ($0.97) 
a  week.  To  married  women  the  sickness  benefit  granted  is  5s.  ($1.22)  a  week, 
during  the  first  13  weeks,  3s.  ($0.73)  a  week,  during  the  second  13  weeks.  They 
also  receive  a  disablement  benefit  of  3s.  ($0.73)  a  week.  These  two  benefits  are 
not  payable  during  two  weeks  before  and  four  weeks  after  confinement,  except  in 
those  cases  where  disease  or  disablement  are  neither  directly  nor  indirectly  connected 
with  childbirth.  A  maternity  benefit  of  30s.  ($7.30)  is  paid  for  four  weeks  to  women 
insured  or  to  wives  of  insured  men,  provided  that  26  weekly  contributions  have 
been  previously  paid.  No  provision  is  made,  however,  for  free  medical  treatment 
or  attendance  during  confinement.  No  funeral  benefit  is  paid. 

The  cost  of  insurance  is  divided  among  the  insured,  the  employer,  and  the 


1917.] 


HOUSE  —  No.  1850. 


251 


Government.  The  proportion  paid  by  each  varies  according  to  the  daily  wage 
earned  and  the  sex  of  the  employed.  In  Ireland  special  rates  of  contributions  are 
prescribed.  In  the  case  of  exceptionally  low-paid  workers  the  contributions  levied 
on  employer  and  State  are  proportionately  increased,  so  that  the  workingman 
actually  pays  less  under  the  British  system  than  he  would  have  to  pay  under  any 
other.  The  following  table  gives  the  proportion  of  rates  paid: 


WEEKLY  CON- 
TRIBUTIONS. 

WEEKLY  WrAGE8 
UP  TO  Is.  6d.  ($0.37). 

WEEKLY  WAGES 
Is.  6d.  TO  2s.  ($0.37 
TO  $0.49). 

WEEKLY  WAGES 
2s.  TO  2s.  6d.  ($0.49 
TO  $0.61). 

Men. 

Women. 

Men. 

Women. 

Men. 

Women. 

Paid  by:  — 
Insured,  . 

" 

_ 

Id.  ($0.02) 

Id.  ($0.02) 

3d.  ($0.06) 

3d.  ($0.06) 

Employer, 

6d.  ($0.12) 

5d.  ($0.10) 

5d.  ($0.10) 

4d.  ($0.08) 

4d.  ($0.08) 

3d.  ($0.06) 

State,      . 

Id.  ($0.02) 

Id.  ($0.02) 

Id.  ($0.02) 

Id.  ($0.02) 

- 

- 

The  employer  is  responsible  for  the  payment  of  insurance  but  may  recover 
advances  by  deducting  from  the  daily  wage  of  his  employees  the  amount  of  contri- 
butions paid  by  him  in  their  behalf. 

When  the  Act  establishing  compulsory  sickness-insurance  was  passed  in  1911, 
there  were  among  the  influential  social  forces  interested  in  these  measures  Friendly 
Aid  Societies.  The  British  Government  decided  to  recognize  those  fulfilling  the 
requirements  of  the  Insurance  Act,  and  io  make  societies,  not  operated  for  profit 
the  administrative  organ.  These  societies  are  controlled  by  the  members,  and, 
supervised  by  the  County  Insurance  Commissioners  who  control  and  manage  the 
National  Health  Insurance  Fund.  All  contributions  received  and  all  sums  provided 
by  Parliament  must  be  paid  into  this  Fund,  which  grants  all  benefits  and  disburses 
all  administrative  expenses.  Any  surplus  not  required  to  meet  current  liabilities 
may  be  made  over  to  the  National  Debt  Commissioners  for  temporary  investment 
in  securities  authorized  by  Parliament  as  secure  investments  for  Savings  Banks 
funds.  The  accounts  of  the  National  Health  Insurance  Fund  are  audited  by  the 
Comptroller  and  Auditor-General. 

Austria.  The  Austrian  compulsory  sickness  insurance  Act  was  passed  on 
March  30,  1888,  and  was  amended  on  April  4,  1889,  and  February  11,  1913.  The 
Act  is  closely  modelled  on  the  German  Act  and  embraces  all  industries  except 
agriculture,  forestry,  home  work,  and  domestic  -service.  For  administrative 
employees  the  salary  limit  is  fixed  at  2,400  crowns  ($486).  The  Act  provides  for 
benefits  for  all  forms  of  sickness  and  for  payments  during  the  first  four  weeks  of 
disability  caused  by  industrial  accidents.  When  illness  continues  more  than  three 
days  no  waiting  period  is  demanded  either  for  cash  or  medical  benefits.  The  cash 
benefit  is  GO  per  cent  of  the  normal  daily  wage  and  during  any  one  illness  this 
grant  is  paid  for  20  weeks  and  may  be  given  for  52  weeks.  To  dependents  one-half 
the  cash  benefit  may  be  allowed.  Insured  women  receive  obstetrical  care  and  a 
maternity  cash  benefit  for  four  weeks  after  delivery.  The  funeral  benefit  amounts 
to  at  least  20  times  the  average  daily  wage  but  is  never  more  than  $20.  Medical 
aid  consists  of  medical  treatment,  hospital  care,  medicines,  and  therapeutic  appli- 
ances. Medical  treatment  to  dependents  is  optional.  Insured  persons  are  permitted 
free  choice  among  the  physicians  who  are  under  contract. 

The  weekly  contribution  levied  on  the  employee  is  two-thirds  of  one  per  cent  of 
wages,  to  which  the  employer  adds  one-half  per  cent.  On  small  ships,  however, 
the  employer  is  required  to  bear  the  entire  cost. 

Sickness  insurance  is  paid  out  from  district  funds  and  other  mutual  funds,  such 


252  SOCIAL  INSURANCE.  [Feb. 

as  establishment  and  guild  funds,  not  operated  for  profit.  Employers  constitute 
two-thirds  and  employees  one-third,  respectively,  of  representation  in  the  adminis- 
trative boards.  The  funds  are  supervised  by  local  and  provincial  officials  under 
the  authority  of  the  Minister  of  the  Interior. 

Hungary.  Sickness  insurance  was  first  introduced  in  Hungary  by  the  Act  of 
1854  which  made  insurance  compulsory  for  workmen  in  government  and  privately 
operated  mines.  The  Act  of  1891  extended  compulsory  sickness  insurance  to  all 
employees  earning  less  than  2,400  crowns  ($486)  annually,  exclusive  of  those  in 
agriculture  and  domestic  service.  This  Act  was  amended  in  1907  so  as  to  include 
employees  of  government  tobacco  factories.  The  Act  covers  all  kinds  of  sickness 
during  the  first  10  weeks  of  industrial  accident  disability. 

Medical  and  nursing  assistance  and  treatment  are  given.  Medical  treatment 
and  hospital  care  are  also  granted  to  dependents.  A  maternity  benefit  for  six 
weeks  after  delivery  is  allowed  to  wives  of  insured  members.  Cash  aid  of  60  per 
cent  of  1$ie  normal  daily  wage  is  paid  for  20  weeks'  illness  and  such  payment  may 
continue  for  one  year.  Dependents  are  paid  one-half  of  the  cash  benefits.  In 
case  of  death  a  funeral  benefit  of  20  times  the  usual  daily  wage  is  given. 

Both  employer  and  employee  contribute  equal  shares  of  the  cost.  In  the  case 
of  miners  two-thirds  of  the  dues  are  paid  by  the  workman  and  one-third  is  paid  by 
the  employer.  The  State,  as  employer,  bears  from  60  to  62  per  cent  of  the  cost  of 
insurance  for  government  miners. 

Insurance  is  administered  through  miners'  funds,  local  mutual  aid  societies,  and 
the  establishment  funds  of  government  tobacco  factories.  Supervision  over  these 
funds  is  exercised  by  the  Government  Insurance  Office. 

Luxemburg.  General  compulsory  sickness  insurance  was  proposed  in  Luxem- 
burg as  early  as  1887  but  the  Act  was  nat  adopted  until  1901  and  went  into  effect 
on  July  31  of  that  year.  The  law  closely  follows  the  German  law  and  applies  to  all 
employees  except  those  in  agriculture  and  domestic  service;  all  salaried  persons 
receiving  more  than  3,000  francs  ($579)  per  year,  with  the  exception  of  government 
and  municipal  employees  already  entitled  to  13  weeks  of  sick-aid.  The  Act  provides 
for  all  kinds  of  sickness. 

There  is  no  waiting  period  for  medical  benefits,  which  consist  of  medical  and 
nursing  assistance  and  treatment,  of  medicines  and  therapeutic  appliances,  and 
hospital  care.  Medical  benefit  to  dependents  of  insured  persons  is  optional.  In 
all  cases  medical  aid  is  paid  until  the  expiration  of  the  thirteenth  week,  and  in  cases 
of  invalidity  may  be  given  for  an  additional  term  of  13  weeks  after  cash  allowance 
expires.  Free  choice  of  physician  is  permitted,  or  of  physicians  who  are  under 
contract. 

The  waiting  period  for  cash  benefit  is  three  days  after  the  commencement  of 
illness.  It  must  be  paid  for  13  weeks  but  can  never  be  paid  for  more  than  one  year. 
The  cash  grant  amounts  to  one-half  the  normal  daily  wage  of  the  insured,  but  is 
never  more  than  three-fourths  of  that  wage.  An  immediate  payment  of  one-half 
the  cash  allowance  may  be  made  to  dependents.  Payment  of  one-eighth  of  daily 
wages  may  be  granted  to  insured  persons  having  no  dependents.  Maternity 
benefit  is  given  any  insured  woman  for  four  weeks  and  not  more  than  six  weeks 
after  delivery,  provided  she  has  been  insured  for  at  least  six  months  in  the  year 
preceding  confinement.  This  benefit  is  optional  to  wives  of  insured  men.  Funeral 
benefit  is  paid  except  in  the  case  of  suicide.  The  amount  is  20  times  the  daily 
normal  wage,  with  the  maximum  payment  fixed  at  80  francs  ($15.44).  Two-thirds 
of  this  sum  may  be  granted  to  an  insured  member  at  the  death  of  his  wife  and  one- 
half  of  this  benefit  at  the  death  of  a  child. 

The  employee  pays  two-thirds  of  the  cost  of  insurance,  to  which  the  employer 
adds  one-third.  Responsibility  of  insurance  rests  with  the  employer.  No  contri- 
bution is  levied  during  illness. 

Insurance  against  sickness  is  carried  by  the  district  funds,  by  mutual  aid  societies 
not  operated  for  profit,  and  recognized  local  sick-funds,  such  as  miners',  guild  and 


1917.]  HOUSE  —  No.  1850.  253 

establishment  funds.  Two-thirds  of  their  committee  members  are  chosen  by  tin- 
insured  and  one-third  by  the  employers.  The  National  Insurance  Commissioner 
supervises  these  funds. 

Norway.  The  Acts  of  September  18,  1909,  and  April  1,  1911  made  sickness 
insurance  compulsory  in  Norway  for  urban  workmen  earning  less  than  1,575  marks 
($375.17)  and  for  rural  workmen  earning  less  than  1,350  marks  ($321.57)  annually. 

Medical  aid  and  hospital  care  are  given  for  a  period  of  26  weeks  but  no  extension 
of  this  time  is  permitted  in  any  one  year.  Free  medical  care  is  also  provided  for 
either  husband  or  wife  and  for  children  under  15  years  of  age.  The  cash  benefit 
amounts  to  60  per  cent  of  the  daily  wage.  Wives  of  insured  members  receive  a 
maternity  allowance  for  six  weeks.  The  funeral  benefit  paid  is  25  times  the  daily 
wage,  with  the  maximum  limit  fixed  at  50  kroner  ($13.40). 

Insurance  is  carried  by  the  National  Insurance  Fund,  but  workmen  may  insure 
themselves  with  local  sick-benefit  funds  and  recognized  mutual  aid  societies.  These 
societies  may  determine  the  actual  dues  which  .shall  be  paid.  As  a  rule,  however, 
the  workman  contributes  60  per  cent  of  his  wages  and  the  employer  10  per  cent. 
Under  no  other  compulsory  insurance  system  is  the  employer's  share  so  small.  The 
commune  grants  a  subsidy  of  10  per  cent  and  the  State  one  of  20  per  cent  for  the 
cost  of  insurance  in  order  to  justify  the  Crown  in  somewhat  more  extended  powers 
of  administration. 

In  1913  there  were  762  societies  with  an  enrollment  of  370,567  members  who' 
eontrilfuted  6,065,656  kroner  ($1,625,596)  during  the  year.  The  average  benefit 
received  per  member  was  21.55  kroner  ($5.78).  The  State  subsidy  in  1913  amounted 
to  1,212,820  kroner  ($325,036.00),  and  the  communes  contributed  798,406  kroner 
($213,973.00). 

Servia.  The  compulsory  sickness  insurance  system  was  adopted  by  Servia  on 
June  29,  1910,  and  went  into  effect  on  July  12,  1910.  It  applies  to  all  workmen 
engaged  in  trade  and  commerce.  The  law  provides  for  all  sickness. 

Medical  treatment  as  well  as  hospital  care  are  furnished  and  the  daily  cash 
benefit  paid  corresponds  to  the  degree  of  disability.  The  amount  is  usually  50  per 
cent  of  the  daily  normal  wage.  A  maternity  benefit  consisting  of  medical  and  cash 
aid  for  12  weeks  is  granted  to  insured  employees.  Any  funeral  benefit  is  entirely 
optional. 

The  cost  of  insurance  is  divided  equally  between  employer  and  employee.  The 
State  contributes  in  addition  an.  annual  subsidy  of  80,000  marks  ($19,056.00)  to  the 
National  Organization. 

The  insurance  is  paid  out  of  local  mutual  sick-funds  and  miners'  and  establish- 
ment funds,  consolidated  into  a  National  Organization  of  Sick-funds  and  supervised 
by  the  Minister  of  the  Interior. 

Rournania.  By  an  Act  passed  January  25,  1912,  and  subsequently  amended 
on  February  14,  1913,  April  4,  1913,  and  June  5, "1913,  Roumania  adopted,  in 
connection  with  old-age  pensions,  a  sickness  insurance  system  compulsory  for  all ' 
employees.  No  official  data  are  available  as  to  the  effect  of  this  law.  All  forms 
of  sickness  are  provided  for,  but  jn  cases  of  industrial  accidents  the  regular  benefits 
are  given  for  the  first  two  weeks  only. 

The  cash  grant  furnished  for  married  workers  is  one-half  of  the  average  wage 
if  the  patient  is  cared  for  at  home,  and  one-fourth  if  hospital  treatment  is  given. 
In  the  case  of  single  workers  the  cash  aid  received  is  35  per  cent  and  10  per  cent, 
respectively.  The  right  to  this  allowance  is  forfeited  when  sickness  is  caused  by 
drunkenness.  Both  cash  and  medical  benefits  are  received  for  a  maximum  period 
of  16  weeks.  Medical  treatment,  hospital  care,  and  the  free  supply  of  medicines,  as 
well  as  of  therapeutic  appliances,  are  also  furnished.  These  benefits  are  also  ac- 
corded to  wives  and  children  of  insured  persons,  if  living  with  them.  A  maternity 
benefit  is  given  for  six  weeks  on  condition  that  at  least  26  weekly  contributions 
shall  have  been  paid.  This  grant  of  assistance  may  be  prolonged  up  to  three  months, 
provided  the  woman  herself  nurses  the  child.  The  funeral  benefit  is  graded  accord- 


254  SOCIAL  INSURANCE.  [Feb. 

ing  to  the  five  wage-groups  into  which  the  workers  are  divided,  and  granted  only 
after  at  least  52  weekly  contributions  have  been  made.  This  benefit  amounts  to 
60  lei  ($11.58)  for  the  first  class,  and  rises  to  100  lei  ($19.30)  for  the  fifth  class. 

The  entire  cost  of  insurance  is  borne  by  the  workman,  according  to  the  rate 
established  for  his  particular  wage-group.  The  weekly  contribution  for  each  group 
is  .05  lei  ($0.01),  .20  lei  ($0.04),  .30  lei  ($0.06),  .45  lei  ($0.09),  .60  lei  ($0.12), 
respectively.  The  employer  is  responsible  for  the  payment  of  contributions  which 
he  may  deduct  from  the  wages  of  his  employees. 

The  insurance  is  carried  by  local  sickness-funds  under  the  supervision  of  the 
Central  Office  of  the  National  Insurance  Fund. 

Netherlands.  On  June  5,  1913,  the  Netherlands  adopted  compulsory  sickness 
insurance.  The  law  applies  to  all  workingmen  except  domestic  servants,  govern- 
ment and  railroad  employees  already  entitled  to  sickness-pay  under  approved 
systems,  property  and  income-tax  payers  in  excess  of  certain  limits,  and  men  serving 
with  the  colors.  Exemption  may  be  claimed,  however,  by  persons  earning  less 
than  0.4  florins  ($0.16)  a  day,  or  invalid  at  the  time  the  law  went  into  effect.  The 
law  covers  all  sickness,  including  pregnancy  and  childbirth,  but  excepts  sickness 
caused  by  industrial  accident  which  is  cared  for  under  the  accident  insurance  laws. 

A  cash  benefit  of  70  per  cent  of  the  mean  rate  of  wages  is  granted  from  the  third 
day  of  disability,  and  continues  up  to  the  limit  of  six  months.  This  allowance  may 
be  increased  to  90  per  cent  and  payment  of  it  continued  for  one  year.  As  medical 
benefit  is  not  compulsory,  arrangements  must  first  have  been  made  for  proViding 
medical  attendance  and  medicines  in  order  to  receive  sick-pay.  Maternity  benefit 
is  paid  immediately.  No  funeral  benefit  is  given. 

The  insurance  is  payable  by  the  employer,  who  may  recover  by  deducting  one- 
half  of  one  per  cent  from  the  wages  of  his  employees.  For  special  risks  of  sickness 
special  rates  of  premiums  are  fixed,  which  are  based  on  a  certain  percentage  of  the 
mean  rate  of  wages.  Workmen  are  divided  into  seven  wage-groups  —  men  earning 
less  than  0.7  florins  ($0.28)  per  diem  in  group  I  to  those  earning  more  than  3.50  florins 
($1.41)  per  diem  in  group  VII.  The  State  subsidy  is  used  to  defray  the  salaries  of 
three  district  insurance  commissioners  as  well  as  of  certain  labor  council  officers. 

The  insurance  is  carried  by  the  labor  councils  and  the  district  insurance  com- 
mittees exercise  supervision  over  a  number  of  these  councils.  Two  of  their  four 
unsalaried  members  are  elected  by  employer  and  employed  in  equal  proportion, 
while  the  State  appoints  an  impartial  chairman  and  three  unsalaried  members. 
There  must  be  a  deputy  for  each  member  of  the  Insurance  Committee. 

Switzerland.  The  first  Swiss  law  on  subsidized  sickness  insurance,  passed  on 
October  5,  1899,  was  rejected  by  an  overwhelming  majority  on  referendum,  May  20, 
1900.  In  1906  the  Federal  Council  again  took  up  the  question  of  unifying  the 
various  isolated  legislative  acts  into  a  national  system  and  proposed  compulsory 
sickness  insurance  in  government  institutions  with  a  monopoly  of  insurance.  The 
new  law  framed  was  adopted  on  June  13,  1911,  to  take  effect  about  January  1,  1914; 
but  no  statistics  are  available  with  regard  to  its  operation.  Cantons  and  com- 
munities may  enforce  sickness  insurance  for  their  population,  or  for  certain  classes 
of  it  only,  and  may  organize  public  insurance  institutions  in  co-operation  with 
existing  mutual  aid  societies.  Swiss  wage-earners  of  either  sex  and  enjoying  at 
least  fairly  good  health  must  have  an  opportunity  to  join  a  sick-benefit  society. 
Under  certain  conditions  they  may  transfer  from  one  society  to  another  without 
loss  of  privilege.  For  new  members  the  period  of  probation  after  entrance  must 
not  be  less  than  three  months. 

Sick  members  are  permitted  to  choose  from  a  panel  of  physicians  and  druggists 
under  contract  with  the  societies.  The  Federal  Government  fixes  schedules  of 
payment  for  medical  and  pharmaceutical  aid,  in  order  to  guarantee  such  choice, 
and  prevent  excessive  demands  in  cost  of  service.  The  waiting  period  after  a 
person  becomes  ill  must  not  exceed  three  days.  The  minimum  cash  benefit  is  fixed 


1917.]  HOUSE  — No.  1850. 

at  1  franc  ($0.193)  per  diem,  and  may  be  given  for  not  more  than  180  days  in  any 
period  of  360  days.  Instead  of  a  money  grant  medical  and  pharmaceutical  help 
may  be  furnished  from  the  first  day  of  illness  for  at  least  six  months.  If  this  assis- 
tance has  been  continued  for  270  days  in  any  one  year,  the  societies  need  not 
defray  more  than  three-quarters  of  the  expense  incurred  on  this  account.  Treat- 
ment at  hospitals  and  at  sanatoria  is  optional.  Maternity  benefits  must  be  granted 
for  at  least  six  weeks,  where  contributions  have  been  paid  for  at  least  nine  months. 
A  minimum  nursing  allowance  of  20  francs  ($3.86),  which  may  be  increased  to  40 
francs  (.$7.72),  is  given  for  another  month.  No  funeral  benefit  is  provided. 

Cantonal  and  communal  authorities  may  compel  employers  to  be  responsible 
for  the  contributions  levied  on  such  of  their  employees  as  are  members  of  govern- 
ment insurance  institutions.  No  insurance  contributions  can,  however,  be  demanded 
from  employers.  The  State  subsidy  fluctuates  according  to  the  benefits  granted. 
It  is  3.5  francs  ($0.68)  for  children  under  14  years  of  age;  3.5  francs  ($0.68)  for 
each  male  adult;  4  francs  ($0.77)  for  each  female  adult,  if  either  the  minimum 
sick-benefit  of  1  franc  ($0.193)  per  day  or  medical  aid  is  furnished;  and  it  is  5  francs 
($0.97)  if  both  benefits  are  provided.  An  additional  amount  of  50  centimes  ($0.10) 
is  paid  if  sick-benefits  are  continued  for  360  days.  This  sum  is  increased  to  a  sum 
of  from  3  to  7  francs  ($0.58  to  $1.35)  per  member  in  mountainous  districts  where 
medical  aid  cannot  easily  be  had.  In  cased  of  confinement  the  State  gives  a  subsidy 
varying  from  20  to  40  francs  ($3.86  to  $7.72).  The  total  amount  of  State  grants 
may  never  be  more  than  one  and  one-half  timts  the  sum  received  by  the  insurance 
societies  from  membership  contributions  for  the  year.  Cantons  and  communitibs 
who  make  sickness  insurance  compulsory  for  their  population,  and  who  pay  in 
part  or  wholly  the  contributions  of  needy  persons,  receive  an  additional  State 
subsidy  amounting  to  one-third  of  their  expenses  on  this  account. 

Government  institutions  and  recognized  mutual  aid  societies  are  the  insurance 
carriers.  These  societies  must  be  Swiss  corporations,  and  must  accept  applicants 
irrespective  of  political  or  religious  qualifications.  The  annual  balance  sheets  of 
such  societies  must  be  submitted  to  the  Federal  Council.  Any  controversy  arising 
is  referred  to  the  cantonal  courts  for  decision;  and  any  exceptions  taken  are  then 
submitted  to  the  Federal  Insurance  Court,  appointed  by  the  Federal  Council. 
The  judges  of  this  court  are  chosen  by  the  Federal  Assembly,  and  serve  for  a  term 
of  six  years. 

France.  The  French  Act  of  June  29,  1894,  introduced  compulsory  sickness 
insurance  for  seamen  and  railway  employees  only,  and  for  miners  earning  up  to 
2,500  francs  ($482.50)  per  annum.  In  all  other  industries  sickness  insurance  rests 
-entirely  with  the  workman.  The  Old  Age  Pension  Act  of  1907  includes  invalidity 
and  fixes  the  maximum  annual  invalid  pension  at  360  francs  ($69.48).  Since  1910 
France  has  paid  insignificant  State  subsidies  to  recognized  voluntary  sickness 
insurance  societies.  These  grants  for  the  most  part,  however,  cover  the  cost  of 
funeral  and  sick-benefits  only. 

With  regard  to  the  cost  of  compulsory  insurance,  employees  contribute  two- 
thirds  of  one  per  cent  of  wages,  to  which  the  employer  adds  one-third  of  one  per 
cent.  Miners  pay  up  to  two  per  cent  of  wages,  or  48  francs  ($9.26)  a  year,  while 
their  employer  gives  a  subsidy  equal  to  one-half  of  his  employee's  share. 

No  recent  information  is  obtainable  concerning  benefits  granted,  the  adminis- 
tration of  insurance  carriers,  or  government  supervision  of  voluntary  sickness 
insurance  societies. 

Italy.  By  the  Act  of  1896  the  Italian  government  required  railway  employees 
to  insure  themselves  against  sickness.  Within  recent  years  proposals  for  general 
compulsory  sickness  insurance  have  been  under  discussion.  It  is,  therefore,  all 
the  more  creditable  that  in  the  absence  of  any  national  sickness  insurance  system 
the  country  adopted  on  July  17,  1910,  a  compulsory  maternity  insurance  law, 
.applicable  to  all  married  and  unmarried  women  between  the  ages  of  15  and  50. 


256  SOCIAL  INSURANCE.  [Feb. 

No  medical  benefit  is  granted,  but  cash  aid  is  given  for  four  weeks  after  delivery 
or  for  not  less  than  21  days.  To  this  cash  benefit  of  30  lire  ($5.79)  the  State  adds 
a  flat  subsidy  of  10  lire  (SI. 93)  for  each  case. 

The  cost  of  insurance  is  shared  in  equal  parts  by  employer  and  employed.  The 
total  contribution  thus  equally  divided  amounts  to  one  lira  ($.193)  for  women 
between  the  ages  of  15  and  20,  and  two  lire  ($0.39)  for  those  from  20  to  25  years 
old.  There  is  no  distinction  in  rates  for  married  and  unmarried  women. 

The  National  Insurance  Fund  (Cassa  Nazionale  di  Providenca)  carries  the 
insurance  and  its  offices  are  responsible  for  administration  and  supervision. 

Russia.  In  Russia  sickness  insurance  has  been  compulsory  for  factory  and 
mine  employees  only,  and  in  1888  it  was  extended  to  railway  employees.  The 
new  compulsory  sickness  insurance  Act  of  June,  1912,  applies  also  to  employees 
in  navigation,  and  to  all  the  above-named  workmen  both  in  European  Russia 
and  the  Caucasian  Provinces.  The  act  is  closely  modelled  on  the  German  insurance 
law. 

The  provision  for  medical  aid  has  been  for  many  decades  a  direct  function  of  the 
employer  who  still  bears  the  entire  cost  for  a  maximum  period  of  four  months.  The 
cash  benefit  for  workmen  with  dependents  is  from  one-half  to  two-thirds  of  the 
daily  wage,  but  single  workingmeii  receive  from  one-fourth  to  one-half  of  their 
wage.  The  cash  benefit  begins  on  the  fourth  day  of  illness,  or  earlier,  and  a  sum 
up  to  100  per  cent  of  the  wage  is  given  for  six  weeks.  The  maximum  time  limit 
for  cash  aid  is  fixed  at  26  weeks  and  may  be  extended  to  not  more  than  30  weeks  in 
the  year  in  case  of  repeated  illness.  This  cash  allowance  is  also  given  for  the  first 
13  weeks  in  case  of  industrial  accidents.  A  maternity  cash  benefit  varying  from 
one-half  to  the  full  amount  of  wages  is  paid  for  two  weeks  before  and  four  weeks 
after  delivery.  This  assistance,  however,  is  granted  only  to  members  of  three 
months  '  standing.  In  case  of  death,  funeral  aid  from  20  to  30  times  the  daily  wage 
is  given,  but  this  is  optional  to  dependents. 

Toward  the  cost  of  insurance  the  employee  contributes  two-thirds  of  one  per 
cent  of  his  wages,  while  the  employer  pays  one-third  of  one  per  cent  in  addition  to 
the  entire  cost  for  medical  aid  or  hospital  treatment,  Persons  earning  more  than 
five  roubles  ($2.57)  a  day  or  more  than  1,500  roubles  ($771.90)  a  year  are  assessed 
on  the  daily  wage  rate. 

Sickness  insurance  is  carried  by  local  mutual  insurance  organizations  and  estab- 
lishment funds.  In  February,  1914,  there  were  in  existence  1,096  such  funds  with 
a  membership  of  833,973  persons.  Supervision  is  exercised  by  the  Workmen's 
Insurance  Council. 

Belgium.  Belgium  has  a  voluntary  sickness  insurance  system,  but  by  an  act 
of  1851,  the  State  made  regulations  for  recognized  mutual  sickness  insurance 
societies.  Since  1904  the  State  has  appropriated  annually  the  sum  of  115,000  francs 
($22,195)  for  distribution  among  societies  providing  sick-benefits  after  the  first  six 
months.  The  State  subsidy  is  comparatively  small  and  is  given  to  improve  rather 
than  extend  the  system  of  voluntary  sickness  insurance.  About  five  per  cent  of 
the  population  are  members  of  these  societies.  In  1913  proposals  to  introduce 
general  compulsory  sickness  insurance  were  under  discussion,  but  no  information 
on  the  subject  has  since  been  obtainable. 

Denmark.  Denmark  has  no  general  compulsory  sickness  insurance.  Since 
1892  the  State  has  granted  a  flat  subsidy  to  recognized  voluntary  mutual  aid 
societies,  amounting  to  one-fifth  of  their  revenues  from  dues,  with  a  maximum 
limit  of  two  kroner  ($0.54)  independently  of  the  number  of  members. 

In  1914  there  existed  1,547  such  recognized  societies  in  the  country  which  received 
a  State  subsidy  of  2,764,989  kroner  ($741,017),  and  a  communal  subsidy  of  205,043 
kroner  ($54,952)  for  that  year.  Such  a  State  benefit  for  any  one  year  is  always 
paid  over  to  the  society  in  the  year  following.  No  recent  information  is  obtainable 
with  regard  to  membership  in  recognized  societies,  or  benefits  granted  by  them,  or 
their  methods  of  administration. 


1917.]  HOUSE  — No.  1850.  257 

By  the  Act  of  April  24,  1913,  which  went  into  effect  on  January  1,  1914,  widows' 
pensions,  as  distinct  from  poor  relief  or  compnlsory  insurance,  were  established. 
The  State  and  the  local  commune  together  pay  for  each  child  under  two  years  of 
age  an  annual  maximum  allowance  of  $27;  for  children  between  two  and  12  years, 
$21.60;  and  for  children  aged  13  and  14,  SI 6.20.  The  total  amount  disbursed  by 
the  State  for  this  purpose  in  1914-1915  was  96,921  kroner  ($25,975). 

Sweden.  The  Swedish  system  of  voluntary  sickness  insurance  received  in 
1891  a  new  stimulus  through  direct  government  subsidies  granted  to  recognized 
sickness  insurance  funds.  These  subsidies  were  augmented  in  1898  with  an  appre- 
ciable effect  on  the  growth  of  registered  societies  and  their  membership. 

In  1912  there  were  registered  2,063  recognized  mutual  aid  societies,  with  a 
membership  of  637,049,  who  contributed  in  fees  a  total  of  6,907,972  kroner 
($1,851,337).  The  administration  of  these  societies  cost  758,256  kroner  ($203,213), 
and  the  State  subsidy  received  by  them  represented  853,536  kroner  ($228,748). 
The  following  disbursements  for  the  year  were  made:  Sick  benefits  6,494,605 
kroner  ($1,740,554);  funeral  benefits  711,303  kroner  ($190,629);  medical  benefits 
211,596  kroner  ($56,708). 

Approximately  10  per  cent  of  the  population  avail  themselves  of  voluntary 
insurance  against  sickness.  Proposals  for  general  compulsory  insurance  are  now 
under  discussion,  but  no  definite  information  can  be  procured  at  present. 


258  SOCIAL  INSURANCE.  [Feb. 


APPENDIX    B. 


OLD-AGE  PENSIONS. 

DESCRIPTIVE  ACCOUNT  OF  NATIONAL  OLD  AGE  PENSION 
SYSTEMS  IN  FOREIGN  COUNTRIES. 

Prepared  by  the  Massachusetts  Bureau  of  Statistics. 
INTRODUCTORY. 

In  nearly  all  of  the  leading  countries  with  the  exception  of  the  United 
States  statutory  provision  for  old  age  insurance  or  pensions  has  been 
made.  The  widely  varying  insurance  and  pension  systems  adopted  are 
of  three  general  types :  Voluntary  insurance;  compulsory  (contributory) 
insurance;  and  non-contributory  pensions.  In  the  present  review  no 
extended  consideration  will  be  given  to  the  first  type,  that  of  voluntary 
insurance,  because  already  in  Massachusetts,  by  Chapter  561  of  the  Acts 
of  1907,  provision  has  been  made  for  the  establishment  of  a  system  of 
savings  bank  life  insurance  and,  therefore,  voluntary  old  age  insurance  is 
not  deemed  to  be  a  subject  for  special  consideration  by  the  legislature  at 
this  time.  Accordingly,  the  present  survey  is  confined  primarily  to  a 
consideration  of  existing  systems  of  compulsory  (contributory)  old  age 
insurance  and  of  non-contributory  old  age  pensions  which  have  been 
established  by  national  governments. 

No  general  system  of  old  age  insurance  or  pensions  has  been  established 
by  the  United  States  Government  nor  by  any  of  the  individual  States, 
although  there  are  in  operation  special  pension  systems  covering  certain 
classes  of  public  employees,  such  as  veterans,  retired  army  and  navy 
officers,  State  employees  (in  Massachusetts),  and  firemen,  policemen, 
teachers  and  certain  other  municipal  employees;  but  these  systems 
hardly  come  within  the  scope  of  the  present  inquiry.  Thus  far,  in  the 
United  States,  the  establishment  of  pension  systems  covering  large 
groups  of  the  population  has  been  confined,  principally,  to  certain  im- 
portant railroad  systems  and  other  industrial  corporations.  To  a  limited 
extent,  the  operations  of  these  systems  have  pre-emptied  the  field,  and 
the  establishment  of  any  general  national  or  State  system  of  old  age 
pensions  would  therefore  result  in  some  duplication  as  respects  beneficiaries 
were  the  corporation  systems  still  to  continue  in  operation.  During  re- 
cent years,  also,  there  has  been  a  marked  increase  in  the  number  of  in- 
dustrial insurance  policies  issued  in  this  country,  while  many  fraternal 
organizations  and  several  important  national  labor  organizations  have 


1917.]  HOUSE  —  No.  1850.  259 

established  pension  systems  for  the  benefit  of  their  superannuated  mem- 
bers. Nevertheless,  it  is  true  that  no  very  considerable  portion  of  the 
population  of  this  country,  or  of  any  of  the  States,  is  yet  covered  by  any 
system  of  old  age  insurance  or  pensions. 

VOLUNTARY  OLD  AGE  INSURANCE. 

The  primary  purpose  in  establishing  State  systems  of  voluntary  old 
age  insurance  is  to  induce  wage-earners  to  provide  for  their  old  age  by 
affording  them  opportunities  to  secure,  at  low  cost,  old  age  insurance 
with  a  certainty  that  the  payment  of  pensions  is  guaranteed  by  the 
government.  Usually  the  system  adopted  provides  for  the  establishment 
or  designation  of  an  agency  which  shall  collect  the  premiums,  care  for 
the  reserve  fund,  and  make  payment  of  specified  benefits  or  pensions. 
In  most  instances,  the  expenses  of  administration  are  met  by  the  govern- 
ment and  liberal  subsidies  are  granted,  thereby  reducing  the  cost  of  in- 
surance to  the  policy  holders.  In  Belgium,  where  the  subsidies  in  1912 
constituted  about  40  per  cent  of  the  benefits  paid,  the  system  has  proved 
more  popular  than  in  other  countries  where  less  liberal  subsidies  are 
granted,  and  indeed  it  appears  to  be  true  that  the  success  of  any  voluntary 
old  age  insurance  system  is  largely  determined  by  the  extent  to  which  it 
has  been  subsidized  by  the  government. 

In  Great  Britain,  Belgium,  France,  Italy,  Spain,  Canada,  and  Massa- 
chusetts, systems  of  voluntary  old  age  insurance  have  been  provided  for 
by  law.  In  Great  Britain,  a  system  of  postal  insurance  and  annuities  was 
first  instituted  in  1864,  and  is  still  in  operation  although  it  has  been  some- 
what modified  by  later  legislation,  and  has  in  a  measure  been  supplemented 
by  the  more  recent  non-contributory  old  age  pension  system  established  in 
1908;  and  in  France,  in  addition  to  a  voluntary,  contributory,  old  age 
insurance  system  first  established  in  1850,  and  a  system  of  State  aid  for 
incapacitated  and  superannuated  workers  which  became  effective  in  1907, 
a  compulsory,  contributory  system  was  also  established  in  1910. 

The  establishment  in  Great  Britain  and  France  of  other  pension  systems 
which  are  in  a  sense  supplementary  to  the  voluntary  systems  previously 
established  indicates  that,  notwithstanding  the  low  cost  at  which  old  age 
insurance  has  been  furnished,  a  considerable  portion  of  the  population  of 
these  two  countries  has  failed  to  make  provision  for  old  age  by  this  means, 
and  the  failure  of  many  other  countries  to  establish  voluntary  old  age 
pension  systems  may  be  taken  as  an  unfavorable  commentary  upon  the 
success  of  such  systems  in  those  countries  where  they  have  been  adopted. 

COMPULSORY  OLD  AGE  INSURANCE. 

In  those  countries  where  old  age  insurance  is  made  compulsory  for 
certain  classes  of  the  population  (usually  wage-earners  and  persons  re- 
ceiving small  salaries)  it  has  not  been  found  practicable  to  attempt  to 


260  SOCIAL  INSURANCE.  [Feb. 

raise  more  than  50  per  cent  of  the  necessary  funds  from  the  persons  insured, 
and,  therefore,  except  for  the  provisions  of  law  making  insurance  ob- 
ligatory, these  several  systems  are  quite  analogous  to  the  voluntary  sys- 
tems under  which  large  subsidies  are  granted  by  the  government.  Even 
in  Germany,  where  the  compulsory  system  has  become  fully  operative, 
the  insured  persons  contribute  only  40  per  cent  of  the  funds  disbursed, 
and  in  other  countries,  which  have  adopted  compulsory  systems,  the  con- 
tributions by  the  beneficiaries  rarely*  exceed  30  per  cent  of  the  total  dis- 
bursements. The  value  of  the  contributory  principle,  therefore,  has  not 
been  demonstrated  as  particularly  important  in  so  far  as  the  amount  of 
the  contributions  is  concerned,  and,  when  the  cost  of  collecting  the  con- 
tributions is  taken  into  consideration,  it  is  held  by  many  who  favor  a  non- 
contributory  system,  that  the  latter  will  provide  equal  benefits  without 
much  additional  cost  to  the  State  over  the  former,  and  at  the  same  time 
will  not  require  the  establishment  of  elaborate  administrative  machinery 
for  the  collection  of  contributions,  and  for  the  recording  of  facts  for  a  long 
period  of  years,  with  reference  to  the  contributors.  If,  however,  the  num- 
ber of  countries  which  have  adopted  a  compulsory,  contributory  system  of 
old  age  insurance  is  any  criterion,  then  such  a  system  appears  to  be  more 
generally  favored  than  either  a  voluntary  or  a  non-contributory  system. 
The  list  of  such  countries  includes  at  least  eleven  in  all,  namely:  Germany, 
France,  Sweden,  Austro-Hungary,  Russia,  Italy,  Roumania,  Netherlands, 
Greece,  Luxemburg,  and  Iceland. 

As  the  compulsory,  contributory  system  in  Germany  was  the  first  of 
its  kind  established,  and  is,  without  question,  the  most  comprehensive 
and  most  widely  known,  it  has  been  selected  as  the  first  to  be  discussed 
and  the  other  ten  countries  in  this  group  will  be  considered  in  the  order 
as  named  above. 

Germany.  The  old-age  and  invalidity  insurance  system,  established  in  Ger- 
many in  1889,  formed  a  part  of  a  comprehensive  system  of  social  insurance  which 
also  included  sickness  insurance,  established  by  an  act  of  1883,  and  accident  insur- 
ance, established  by  an  act  of  1884.  By  subsequent  legislation  the  system  was 
extended  in  scope  and  perfected  in  detail,  and,  in  1911,  the  several  acts  and  amend- 
ments were  consolidated  into  a  single  code,  and  a  new  feature,  that  of  "survivors' 
insurance"  was  added.  Because  of  the  fact  that  old-age,  invalidity,  and  survivors' 
insurance  are  administered  as  a  single  system,  no  one  feature  of  this  system  can  be 
properly  discussed  without  some  reference  to  the  other  features,  nor  can  data 
with  reference  to  the  operation  of  the  old-age  insurance  feature  be  presented  sep- 
arately, so  as  to  enable  one  to  make  comparisons  (which  may  not  be  misleading) 
between  the  costs,  etc.,  of  old-age  insurance  in  Germany  and  in  other  countries. 

As  the  law  now  stands  (Code  of  1911)  insurance  is  obligatory  for  all  persons, 
from  the  sixteenth  to  the  seventieth  year  of  age,  whose  annual  earnings  do  not 
exceed  2,000  marks  ($476)  and  who  are  gainfully  employed  as: 

(1)  Workmen,  helpers,  journeymen,  apprentices  or  servants; 

(2)  Establishment  officials  or  foremen; 

(3)  Clerks  or  apprentices  in  commercial  establishments; 

(4)  Actors  or  musicians; 

(5)  Teachers  or  tutors; 

(6)  Masters  or  seamen  of  sea-going  or  inland  vessels. 


1917.] 


HOUSE  — No.  1850. 


261 


Certain  classes  of  public  employees,  otherwise  provided  for,  are  exempt.  Volun- 
tary insurance  is  open  to  employers  engaged  in  small  business  enterprises,  to  salaried 
employees  who  earn  not  more  than  3,000  marks  ($715)  per  year,  and  to  wives  who 
were  insured  before  marriage,  but  the  number  who  take  advantage  of  these  voluntary 
provisions  is  negligible.  The  number  of  persons  compulsorily  insured,  on  the  other 
hand,  embraces  substantially  the  entire  wa^e-earning  population  of  the  Empire. 
The  total  number  of  persons  insured  in  1914  was  11,798,922,  or  about  17.9  per  cent 
of  the  total  population  of  66,096,000. 

The  insurance  funds  are  derived  from  three  sources:  Insured  employees, 
employers,  and  the  Imperial  revenues.  The  employer  is  held  responsible  for  the 
insurance  of  all  persons  employed  by  him  and  for  the  payment  of  the  premiums, 
being  authorized  to  deduct  the  employee's  share  of  the  premiums  from  his  wages. 
He  receipts  the  employee's  payments  by  affixing  government  insurance  stamps 
to  the  employee's  receipt  cards.  The  Imperial  Government  contributes  a  fixed  sum 
each  year  toward  every  pension  and  also  bears  the  expenses  of  administration 
and  of  the  payment  of  pensions  through  the  post-offices. 

For  administrative  purposes  the  insured  employees  are  grouped  in  five  wage 
classes,  determined  by  total  annual  earnings,  and  their  contributions  are  made 
weekly  in  accordance  with  the  following  graded  scale: 


CLASS. 

Annual  Earnings. 

Weekly  Contribution. 

I  

Less  than  350  marks  ($83.37). 

16  pfennige  ($0.038). 

II  

350  to  550  marks  ($131.01). 

24  pfennige  (    .057). 

Ill  

550  to  850  marks  ($202.47). 

32  pfennige  (    .076). 

IV  

850  to  1,150  marks  ($273.93). 

40  pfennige  (    .095). 

V  

More  than  1,150  marks  ($273.93). 

48  pfennige  (    .114). 

In  1912  the  total  receipts  from  all  sources  was  399,938,100  marks  ($95,265,255), 
of  which  amount  34.2  per  cent  was  contributed  by  employers,  34.2  per  cent  by  em- 
ployees, 13.8  per  cent  by  the  Imperial  Government,  and  17.8  per  cent  was  in  the 
nature  of  interest  on  accumulated  reserves  and  miscellaneous  receipts. 

The  benefits  comprise:  (1)  Old-age  pensions;  (2)  Invalidity  pensions;  (3)  Sick- 
ness pensions;  (4)  Widows'  and  orphans'  pensions,  and  (5)  Medical  care. 

The  old-age  pension  is  payable  from  the  seventieth- birthday  to  a  person  who  has 
made  at  least  1,200  weekly  contributions,  but  payment  of  contributions  may  be 
omitted  without  loss  of  rights  during  sickness,  accidental  disability,  or  military 
service.  The  required  term  of  insurance  is  so  long  (over  23  years)  that  no  person 
could  have  obtained  a  pension  before  1914.  To  meet  this  objection  the  required 
term  was  reduced  by  forty  weeks  for  each  year  of  age  over  40  at  the  time  the  act 
became  operative.  Thus  a  man  who  was  already  70  years  of  age  in  1891  could 
claim  an  immediate  pension. 

An  old-age  pension  is  made  up  of  two  parts:  (1)  The  Imperial  subsidy  of  50 
marks  ($11.91),  which  is  the  same  for  all  pensions,  and  (2)  The  insurance  annuity, 
which  is  60  marks  ($14.29)  for  the  first  wage  class  and  increases  by  steps  of  30 
marks  ($7.15)  for  each  succeeding  class.  The  entire  pension  thus  ranges  from  110 
marks  ($26.20)  per  year  in  the  lowest  to  230  marks  ($54.79)  in  the  highest  class. 
If  a  pensioner  has  been  a  member  of  different  wage  classes  at  different  times,  the 
insurance  annuity  is  prorated.  Whatever  the  amount,  pensions  are  paid  monthly, 
in  advance. 

The  total  number  of  old-age  pensions  in  effect  on  January  1,  1914,  was  87,261. 
The  number  of  old-age  pensions  has  decreased  from  year  to  year  due  to  the  increased 


262  SOCIAL  INSURANCE.  [Feb. 

number  of  invalidity  pensions  held  by  persons  70  years  of  age  or  over.  By  way 
of  explanation  it  should  be  stated  in  this  connection  that  when  an  insured  person 
who  is  receiving  an  invalidity  pension  reaches  the  age  of  70,  he  has  the  option  of 
choosing  an  invalidity  or  an  old-age  pension,  and  the  former  is  usually  chosen 
because,  ordinarily,  it  is  of  a  larger  amount. 

The  average  amount  of  all  old-age  pensions  granted  in  1914  was  167.99  marks 
($40.02),  or  about  $3.33  per  month.  The  average  has  slowly  risen,  having  been 
124  marks  ($29.54)  in  1891,  145.54  marks  ($34.67)  in  1900,  and  166.15  marks 
($39.58)  in  1908.  The  increase  is  attributable  to  two  causes:  (1)  Wages  have  been 
rising  and  the  proportion  of  persons  in  the  lower  wage  classes  has  consequently 
decreased,  and  (2)  pensions  granted  during  the  "transitional  period"  (1891  to  1914) 
were  necessarily  kept  low  because  of  the  small  number  of  contributions  which  had 
been  paid  in  by  the  pensioners.  Each  year  up  to  1914  the  number  of  contributions 
increased  and  consequently  the  sums  granted  as  pensions  were  automatically 
increased. 

The  pension  age  (70  years)  is  so  high  that  very  few  live  to  enjoy  the  old-age 
benefit,  consequently  compulsory  old-age  insurance  would  naturally  be  unpopular 
were  not  this  objection  met  by  the  granting  of  an  invalidity  pension  in  case  of 
permanent  disability  before  the  pension  age.  Because  of  the  interdependence  of 
old-age  and  invalidity  insurance,  the  latter  should  be  also  discussed  in  this  con- 
nection. 

Invalidity  is  defined  as  inability,  through  accident  or  disease,  to  earn  one-third 
of  the  normal  wages  earned  in  the  same  occupation  and  locality.  Accidental  injury 
sustained  in  the  course  of  employment  is  excluded,  since  incapacity  from  that 
cause  is  otherwise  provided  for.  An  invalidity  pension  can  be  drawn  only  after 
200  weeks' .insurance  and  after  the  payment  of  at  least  100  weekly  contributions. 

An  invalidity  pension  consists  of: 

(a)  The  Imperial  subsidy  of  50  marks  ($11.91); 

(b)  A  basic  insurance  annuity  of  60  marks  ($14.29)  for  the  first  class,  increasing  by  10  marks 
($2.38)  for  each  succeeding  class;  and 

(c)  A  supplementary  amount  equal  to  the  number  of  weekly  contributions  which  the  pen- 
sioner has  paid,  multiplied  by  3  pf.  ($.007)  for  the  first  class,  6  pf.  ($.014)  for  the  second,  8  pf. 
($.019)  for  the  third,  10  pf.  ($.024)  for  the  fourth,  and  12  pf.  ^$.029)  for  the  fifth  class.    Under  this 
arrangement  an  invalidity  pension  will  be  greater  or  less  than  an  old-age  pension,  according  to 
the  length  of  the  insurance  period  prior  to  invalidity.    Since  1906,  however,  invalidity  pensions 
have  averaged  higher  than  eld-age  pensions. 

The  Code  of  1911  provides  a  further  allowance  of  10  per  cent  of  the  invalidity 
pension  for  each  child  under  16,  but  such  allowance  is  limited  to  50  per  cent  in  all. 
Of  130,609  invalidity  pensions  granted  in  1914,  27,112  carried  such  allowances. 

The  smallest  invalidity  pension  is  116  marks  ($27.63)  yearly.  The  average  of 
such  pensions  in  1914  was  200.81  marks  ($47.83),  as  compared  with  an  average  of 
167.99  marks  ($40.02)  for  old-age  pensions.  The  average  is  increasing  for  the  same 
reasons  which  operate  in  the  case  of  old-age  pensions. 

The  number  of  invalidity  pensions  in  force  at  the  close  of  1914  was  998,339,  as 
compared  with  only  87,261  old-age  pensions.  The  number  has  risen  steadily  from 
31  in  1891  to  405,335  in  1900,  and  868,086  in  1908.  As  already  explained,  this 
increase  has  been  accompanied  by  a  decrease  in  the  number  of  old-age  pensions. 

The  aggregate  payments  on  account  of  invalidity  pensions  in  1912  was  158,715,621 
marks  ($37,806,061)  as  compared  with  an  aggregate  of  14,061,878  marks  ($3,349,539) 
for  old-age  pensions.  The  relative  importance  of  invalidity  pensions  has  increased 
and  that  of  old-age  pensions  has  correspondingly  decreased  year  by  year.  The 
aggregate  expenditures  for  these  two  benefits  stood  as  1  to  2  in  1894,  as  2  to  1  in 
1900,  as  8  to  1  in  1908  and  as  11  to  1  in  1912.  In  fact,  the  greater  part  of  the 
invalidity  pensions  are  in  reality  old-age  pensions.  Out  of  103,200  invalidity  and 
old-age  pensions  granted  during  1912  to  persons  of  50  years  of  age  or  over,  only 


1917.]  HOUSE  — No.  1850.  .  263 

28,702,  or  27.8  per  cent  were  to  persons  of  70  years  of  age  or  ovar  while  50,677,  or 
49.1  per  cent  were  to  persons  under  65.  These  figures  indicate  that  incapacity 
from  old  age  more  often  begins  before  65  than  after  70  years  of  age. 

Ordinary  cases  of  sickness  are  cared  for  at  the  expense  of  the  sickness  insurance 
funds.  But  if  disability  continues  beyond  the  twenty-sixth  week,  a  temporary 
invalidity  or  "sickness"  pension  (Krankenrente)  is  granted.  Sickness  pensions 
are  identical  in  amount  with  invalidity  pensions,  and  the  definition  of  disability  is 
the  same  —  inability  to  earn  one-third  of  normal  wages.  The  number  of  such 
pensions  in  force  January  1,  1914,  was  16,555;  the  entire  cost  during  1912  was 
3,201,735  marks  ($762,653)  and  the  average  pension  was  192.3  marks  ($45.81). 

Under  the  law  of  1891  the  only  death  benefit  was  the  return  of  contributions  to 
the  dependents  of  an  insured  person  who  died  before  receiving  a  pension.  This 
left,  not  only  orphans,  but  aged  and  invalid  widows  without  provision.  This  defect 
in  the  system  was  remedied,  to  some  extent,  by  the  widows'  and  orphans'  pensions 
established  by  the  Code  of  1911.  A  pension  is  payable  only  to  an  invalid  widow, 
but  "widow's  money,"  equal  to  one  year's  pension,  is  paid  in  any  case  upon  the 
death  of  the  husband.  The  widow's  pension  consists  of  the  Imperial  subsidy  of 
50  marks  ($11.91)  and  of  three-tenths  of  the  insurance  annuity  to  which  her  hus- 
band would  have  been  entitled  at  the  time  of  death.  Aged  women  are,  therefore, 
not  as  well  provided  for  as  aged  men,  in  that  the  pension  is  only  about  one-half 
as  much  as  that  granted  in  case  of  actual  invalidity.  There  is  no  "old-age"  pension, 
as  such,  for  women. 

The  widow's  pension  provisions  became  operative  in  July,  1912.  In  1914  pen- 
sions were  granted  to  9,834  widows,  the  average  amount  having  been  78.85  marks 
($18.78)  per  annum,  and  30,223  orphans'  pensions  were  granted,  the  average  amount 
having  been  78.12  marks  ($18.61). 

Whenever  it  is  believed  that  a  case  of  invalidity  can  be  benefited,  or  impending 
invalidity  prevented,  a  course  of  treatment  may  be  given,  the  expenditure  being 
charged  to  the  invalidity  and  old-age  fund.  Preventive  treatment,  in  fact,  has 
become  one  of  the  most  beneficent  activities  of  this  branch  of  social  insurance. 
Sixty-five  or  more  sanatoria  are  maintained,  at  which  about  70,000  persons  are 
treated  annually.  The  great  cause  of  premature  invalidity  is  tuberculosis,  and 
nearly  60  per  cent  of  all  the  cases  treated  are  tubercular.  The  efficacy  of  the  treat- 
ment is  indicated  by  the  fact  that  more  than  80  per  cent  of  the  patients  are  dis- 
charged with  "disability  removed." 

The  expenditure  for  invalidity  pensions  increased  from  7,250,000  marks 
($1,726,950)  in  1912  to  over  9,000,000  marks  ($2,143,800)  in  1914,  while  the  cost 
of  sickness  pensions  rose  from  24,000  marks  ($5,717)  in  1912  to  about  360,000 
marks  ($85,752)  in  1914.  The  decrease  in  expenditures  on  account  of  old-age 
pensions  was,  on  the  other  hand,  400,000  marks  ($95,280). 

Invalidity  and  old-age  insurance  is  administered  by  forty-one  territorial  and 
special  "institutes"  under  the  general  supervision  of  the  Imperial  Insurance  office. 
The  total  cost  of  administration  in  1914  was  24,156,658  marks  ($5,754,116).  The 
cost  per  1,000  marks  ($238.20)  of  total  expenses  in  1914  was  81  marks  ($19.29)  as 
against  83  marks  ($19.77)  for  the  years  1912  and  1913.  The  Central  Office,  a 
branch  of  the  Imperial  Insurance  Institute,  is  administered  by  highly  trained 
experts.  The  published  reports  are,  therefore,  the  most  comprehensive  of  their 
kind  anywhere  issued. 

The  most  strildng  feature  of  old-age  relief  in  Germany  is  its  correlation  with  a 
comprehensive  scheme  of  workingmen's  insurance.  Accidental  injury  in  the  course 
of  employment,  sickness,  child-birth,  permanent  invalidity,  premature  death  and 
old  age,  all  are  provided  for  by  compulsory  insurance.  Especially  significant,  in 
the  present  connection,  is  the  interdependence  of  old  age  with  invalidity  and 
survivors'  insurance.  When  it  is  understood  that  60  per  cent  of  the  insured  persons 
die  before  attaining  the  seventieth  year,  and  that  of  all  old-age  and  invalidity 
pensioners,  88  per  cent  are  under  70  years  of  age  and  54  per  cent  are  under  60  upon 


264  SOCIAL  INSURANCE.  [Feb. 

first  receipt  of  pensions,  it  is  clear  that  the  old-age  pensions  alone  would  afford  a 
very  unsatisfactory  degree  of  protection,  nevertheless  they  do  constitute  relatively 
large  returns  upon  the  investment  made  in  the  form  of  premiums  paid  by  those 
insured.  » 

Whatever  may  be  the  beneficial  effects  of  social  insurance  in  the  case  of  individual 
pensioners,  it  cannot  be  denied  that  this  system  has  resulted  in  improved  standards 
of  health  and  work  of  the  general  wage-earning  population,  and  to  it  has  been  due 
in  some  large  measure  the  remarkable  industrial  development  of  Germany  in  recent 
years. 

France.  The  compulsory  old-age  insurance  law  of  1910  prescribes  insurance 
for  practically  all  working  people  "of  whatever  nationality"  who  earn  less  than 
3,000  francs  ($579)  per  annum  (including  those  State  employees  who  do  not  come 
under  the  regulations  of  civil  and  military  pensions). 

The  receipt  of  a  pension  is  conditioned  upon  the  regular  payment  of  premiums 
for  30  years,  except  that  the  number  of  payments  is  reduced  to  28  for  all  men  who 
have  performed  at  least  two  years'  military  service;  and  for  women  the  birth  of 
each  child  is  reckoned  as  one  year's  insurance,  which  may  be  deducted  from  the 
prescribed  30  payments.  There  are  three  groups  of  premiums  depending  upon 
age  or  sex,  and  corresponding  to  three  wage  groups  for  insurable  wage-earners  as 
follows:  men,  9  francs  ($1.74)  per  year;  women,  6  francs  ($1.16)  per  year;  minors 
under  18  years  of  age,  4.5  francs  ($0.87)  per  year.  Responsibility  for  payments 
of  premiums  rests  with  the  employer  who  must  duplicate  his  employees'  contri- 
butions, which  are  receipted  for  by  means  of  stamps  affixed  to  cards. 

The  original  State  subsidy  of  60  francs  ($11.58)  was  increased  to  100  francs  ($19.30) 
by  an  amendment  in  1912.  This  annual  grant  is  paid  in  those  cases  where  the 
30  prescribed  subscriptions  have  been  made,  and  is  increased  one-tenth  for  every 
insured  person  of  either  sex  who  shall  have  brought  up  at  least  three  children  to 
the  age  of  16.  If  premiums  are  paid  less  than  30  but  more  than  15  years,  the  State 
subsidy  is  calculated  on  a  basis  of  3.33  francs  ($0.64)  for  each  year  of  complete 
payments.  If  less  than  15  annual  payments  were  made,  the  State  allows  no  pension 
subsidy  whatsoever. 

The  pensionable  age  is  65,  but  pensions  may  be  drawn  at  55  years  of  age,  subject 
to  a  proportionate  reduction  both  in  amount  of  pension  and  of  State  grant.  In  case 
of  death,  if  three-fifths  of  contributions  were  paid  in  and  no  pension  had  been  re- 
ceived, children  of  the  deceased  may  receive  50  francs  ($9.65)  a  month  for  from 
4  to  6  months;  in  case  there  are  no  children,  the  widow  may  receive  this  amount 
for  3  months;  in  case  of  divorce,  when  the  exclusive  fault  of  the  husband  was  the 
ground  for  divorce,  the  wife  may  receive  this  sum. 

All  persons  who,  in  1910,  were  already  35  years  of  age  must  insure.  If  between 
35  and  40  years  old,  the  State  grant  of  60  francs  ($11.58)  is  not  diminished;  if 
46  years  old,  it  is  raised  to  62  francs  ($11.97).  The  grant  increases  2  francs  ($0.39) 
thereafter  for  every  additional  year  of  age  at  which  insurance  begins.  In  accordance 
with  provisions  of  the  Act  of  1905  persons  over  65  years  of  age  receive  such  a  pension, 
exceeding  100  francs  ($19.30)  but  less  than  240  francs  ($46.32),  as  their  needs  may 
require.  The  Old  Age  Pension  Act  of  1907  includes  invalidity,  and  the  maximum 
invalidity  pension  is  360  francs  ($69.48)  per  year. 

In  addition  to  compulsory  insurance,  a  system  of  optional  insurance  has  been 
extended  to  private  persons  receiving  small  income,  employers  engaged  in  small 
enterprises,  peasant  proprietors,  independent  workingmen,  and  to  wage-earners 
whose  annual  income  is  more  than  3,000  francs  ($579)  but  less  than  5,000  francs 
($965).  The  voluntary  annual  contribution  rate  is  from  9  ($1.74)  to  18  ($3.47) 
francs. 

The  estimated  number  of  persons  to  be  insured  under  this  Act  is  from  10  to  12 
millions.  The  number  of  persons  insured  in  1913  was  7,854,132  and  the  income 
from  the  sale  of  stamps  was  45,525,540  francs  ($8,786,429). 

On  June  30,  1910,  the  total  number  of  persons  pensioned  under  this  Act  was 


1917.]  HOUSE  —  No.  1850.  265 

569,456,  and  on  September  30,  1912,  this  total  had  increased  to  640,532.  It  is- 
estimated  that  about  one-third  of  the  total  number  of  French  working  men  were 
actually  insured  18  months  after  this  law  became  effective.  The  Act  secures 
substantial  incomes  for  many  who  could  not  be  induced  voluntarily  to  provide 
for  their  old  age  through  private  institutions,  and  it  accomplishes  this  without 
inviting  thriftlessness  in  the  decade  before  receipt  of  a  pension.  Putting  the  pen- 
sionable age  at  65  instead  of  at  70  brings  a  much  heavier  charge  upon  the  French 
Treasury. 

The  amounts  paid  as  old-age  pensions  are  slightly  higher  than  those  paid  in 
Germany,  but  under  the  German  system  certain  additional  benefits  accrue  to  the 
insured. 

Sweden.  The  Swedish  old-age  insurance  law  of  1913  is  more  comprehensive 
than  that  of  either  Germany  or  France.  The  French  and  German  systems  are 
practically  confined  to  persons  gainfully  employed,  while  the  Swedish  law  applies  to 
the  whole  adult  population,  including  married  women. 

Every  Swedish  man  or  woman  from  the  sixteenth  to  the  sixty-sixth  year,  inclu- 
sive, pays  an  annual  tax,  or  premium,  of  3  crowns  ($0.80).  For  inconfes  over  500 
crowns  ($134)  a  surtax  is  imposed,  ranging  up  to  10  crowns  ($2.68)  for  incomes  over 
1,200  crowns  ($322)  per  annum.  Additional  voluntary  payments  may  be  made, 
not  to  exceed  30  crowns  ($8.04)  per  year  in  all.  Members  (and  their  wives)  of  the 
military,  naval,  and  civil  service,  who  are  otherwise  provided  for,  and  permanently 
disabled  persons,  are  exempt. 

If  a  pensioner  receives  poor  relief,  then  his  pension  must  be  paid  in  part  or  in 
whole  to  the  public  charity  organization  in  order  to  reimburse  it  to  the  amount  of 
the  relief  given  to  such  pensioner.  If  institutional  care  is  given,  the  institution  or 
hospital  may  claim  the  pension  to  reimburse  itself  to  the  amount  charged  for  such 
care  of  a  pensioner.  If  a  pensioner  is  a  convict,  or  imprisoned  for  more  than  one 
month,  his  pension  is  withheld  during  that  time;  his  dependents  may,  however, 
claim  it  for  their  support.  Habitual  drunkenness  and  voluntary  idleness  are  dis- 
qualifications. Moreover,  a  pension  reverts  to  the  general  insurance  fund  if  it  is 
not  claimed  within  one  year  after  it  becomes  due. 

An  old-age  pension  is  payable,  without  respect  to  incapacity,  from  the  sixty- 
seventh  year.  An  invalidity  pension  is  payable  at  any  age  in  case  of  permanent 
disability.  The  annual  amount  of  the  pension  is  30  per  cent  for  men,  and  24  per 
cent  for  women,  of  the  whole  amount  that  has  been  paid  in  by  the  beneficiary.  In 
addition,  the  government  grants  a  subsidy  of  150  crowns  ($40.20)  per  annum  for 
men  and  140  crowns  ($37.52)  for  women  whose  whole  annual  income  does  not 
exceed  50  crowns  ($13.40).  This  subsidy  is  reduced  by  one-half  of  the  pensioner's 
income  over  50  crowns  ($13.40),  and  ceases  altogether  when  the  income  reaches 
300  crowns  ($80.40)  for  a  man  or  280  crowns  ($75.04)  for  a  woman. 

It  will  be  seen  that  for  the  lower  v/age  classes  the  government  subsidy  will  be 
the  chief  component  of  the  pension.  For  a  generation  to  come,  the  government 
subsidy  will  be  nearly -the  sole  constituent  of  all  pensions.  At  least  thirty  years 
must  elapse  before  the  insurance  annuity  will  amount  to  any  considerable  sum. 

In  1914  the  number  of  pensions  granted  was  33,138  and  the  total  amount  paid 
was  1,875,457  crowns  ($502,622),  or  56.6  crowns  ($15.17)  per  capita.  Records 
further  show  that  pensions  were  granted  to  10,565  men,  totaling  623,120  crowns 
($166,996),  or  58.98  crowns  ($15.81)  per  capita;  and  to  22,573  women  to  the  amount 
of  1,252,336  crowns  ($335,626),  or  55.48  crowns  ($14.87)  per  capita.  The  total 
number  of  persons  insured  under  the  Act  in  1914  was  3,225,700.  They  contributed 
a  total  of  14,571,000  crowns  ($3,905,028).  The  number  of  voluntary  cases  insured 
in  1914  was  628. 

Austro-Hungary.  The  Austro-Hungary  compulsory  old-age  insurance  law  of 
1906,  in  force  since  January  1,  1909,  is  restricted  to  salaried  employees,  and  does 
not,  therefore,  make  general  provision  for  the  aged. 

In  the  Austrian  mining  industry  operated  by  the  State,  a  compulsory  old-age 


266  SOCIAL  INSURANCE.  [Feb. 

pension  fund  was  established  as  early  as  1854,  and  the  State,  as  employer,  pays 
one-half  of  the  contributions. 

Russia.  In  Russia  no  general  provision  is  made  for  invalidity  and  old-age 
insurance,  but  in  1881  an  Act  was  passed  which  provided  for  compulsory  old-age 
insurance  of  employees  in  the  government  mines.  Old-age  insurance  systems, 
established  as  early  as  1858  by  private  railroads,  were  made  compulsory  in  1888 
for  such  railroads,  and  in  1894  for  State  railroads. 

In  1914  the  government  paid  117,994  roubles  ($60,694)  for  pensions,  which  is  an 
increase  of  1,824  roubles  ($939)  over  the  amount  for  the  preceding  year. 

Italy.  The  Italian  National  Institution  for  the  Insurance  of  Workers  against 
Invalidity  and  Old  Age  dates  from  1898  and  is  modeled  rather  closely  upon  the 
French  National  Retirement  Fund.  In  1899,  a  law  was  passed  providing  that 
employees  in  the  tobacco  industry  should  be  insured  in  this  Institution.  In  1904,  a 
bill  for  uniform  insurance  was  introduced  and  became  law,  and  in  1905,  this  law 
was  extended  to  employees  of  government  engraving  and  printing  offices,  and  in 
the  same  year  to  employees  of  the  government  salt  works.  In  1908  the  com- 
pulsory pension  system  was  extended  to  include  government  railway  employees: 
in  1910  to  include  persons  engaged  in  the  shipping  industry,  and  in  1913  to  include 
sailors. 

The  pensionable  age  is  60  years  for  men,  and  55  years  for  women.  The  monthly 
contribution  from  the  wage  of  an  employee  is  2  lire  ($0.39)  for  men,  1  lira  ($0.193) 
for  women.  The  smallest  pension  granted  is  480  lire  ($92.64)  for  men,  300  lire 
($57.90)  for  women.  The  total  annual  subsidy  of  the  State  and  the  Institution 
given  in  every  case  is  34  lire  ($6.56)  for  men,  22  lire  ($4.25)  for  women. 

Roumania.  In  1912,  compulsory  old-age  and  invalidity  insurance  was  estab- 
lished by  law,  but  there  is  no  evidence  at  hand  to  the  effect  that  the  system  has  yet 
become  operative.  The  act  appears  to  be  modelled  upon  both  the  German  and  the 
French  acts.  Under  this  act,  invalidity  is  denned  as  inability  to  earn  one-third  of 
normal  wages,  and  in  this  respect  the  act  follows  the  German  precedent.  The 
pensionable  age  is  65  years.  The  French  method  of  uniform  weekly  contributions 
for  all  classes  of  insured  persons  was  adopted.  The  weekly  rate  is  45  bani  ($0.87) 
for  the  first  10  years  from  the  date  the  act  becomes  effective,  and  employer,  employee 
and  the  State  contribute  equally.  The  employer  is  responsible  for  the  worker's 
share,  which  he  may  deduct  from  the  wages.  The  normal  old-age  pension  granted 
is  150  lei  ($28.95),  and  in  order  to  receive  it,  contributions  must  have  been  paid 
altogether  for  at  least  1,200  weeks.  The  invalidity  pension  is  increased  by  10  bani 
$0.193)  for  every  weekly  contribution  exceeding  200  contributions.  It  is  paid  to 
any  insured  person  after  he  has  been  ill  for  16  consecutive  weeks.  The  number  of 
persons  insurable  in  1913  has  been  estimated  at  150,000. 

Netherlands.  An  act  passed  in  1913  provided  that  old-age  and  invalidity 
insurance  should  be  compulsory  for  all  "workers"  (with  certain  exceptions)  earning 
less  than  1,200  florins  ($482)  per  year.  Those  insured  under  the  act  are  entitled 
to  a  pension  on  attaining  the  age  of  70,  or  earlier,  if  incapacitated,  incapacity  being 
denned  as  inability  to  earn  one-third  of  normal  wage.  Surviving  children  of  insured 
persons  also  receive  annuities  until  they  reach  the  age  of  13  years.  In  order  to  be 
eligible,  a  pensioner  must  be  needy  and  deserving,  and  must  not  have  received 
public  charity.  Persons  convicted  of  crimes,  drunkards,  and  those  who  lead  a 
dissolute  life  are  disqualified.  Continuous  residence  of  at  least  20  years  and  con- 
tinuous citizenship  of  at  least  5  years  are  necessary  qualifications. 

Insured  persons  are  grouped  in  five  wage  classes,  determined  by  total  annual 
earnings  as  follows: 

First  class, less  than  240  florins  ($96.48). 

Second  class 240  to  400  florins  ($160.80). 

Third  class 400  to  600  florins  ($241.20). 

Fourth  class 600  to  900  florins  ($361.80). 

Fifth  class 900  florins  and  over. 


1917.]  HOUSE  — No.  1850.  267 

Military  conscripts  serving  with  the  colors  are  assigned  to  the  second  class  and 
their  contributions  are  paid  by  the  State.  The  weekly  contributions  for  the  re- 
spective classes  are  20  cent.  ($0.08);  24  cent.  ($0.096);  32  cent.  ($0.129);  40  cent. 
($0.161);  and  48  cent.  ($0.193).  Contributions  are  payable  generally  by  the  em- 
ployers who  may  deduct  from  the  wages  of  each  employee  a  portion  of  the  contri- 
bution paid  in  his  behalf,  the  proportion  varying  according  to  the  wage  class  of 
the  employee.  Contributions  are  paid  by  means'  of  stamps  affixed  to  cards,  or  in 
cash  to  the  Local  Labor  Council. 

The  amount  of  the  pension,  whether  on  account  of  old  age  or  invalidity,  is 
computed  as  follows:  a  .sum  described  as  the  "basis"  of  the  pension  is  first  deter- 
mined by  multiplying  the  aggregate  amount  of  the  contributions  paid  by  325; 
the  product  is  then  divided  by  the  number  of  weeks  during  which  the  insurance 
has  continued.  The  number  of  weeks  during  which  invalid  pension  has  been  paid, 
and  the  premiums  paid  in  respect  of  such  weeks,  are  not  taken  into  account  in 
making  such  computation.  The  "basis"  of  the  pension  is  then  increased  by  a  sum 
equal  to  14  per  cent  of  the  total  amount  of  premiums  paid,  but  this  sum  must  in 
no  case  be  less  than  a  fifth  of  the  "basis."  In  accordance  with  this  formula  an 
insured  person  who  has  paid  48  weekly  contributions  each  year  from  the  age  of  20 
to  the  age  of  70,  and  whose  wages  were  $5  a  week  up  to  the  age  of  25,  $6  a  week  up 
to  the  age  of  30,  and  $7  a  week  thereafter  would  be  entitled  to  a  pension  of  about 
$2.30  a  week  at  the  age  of  70.  In  the  event  of  his  becoming  incapacitated  at  the 
age  of  30,  he  would  from  that  time  onward  receive  about  $1.25  a  week.  Should 
such  incapacity  not  occur  until  his  40th  year,  he  would  receive  about  $1.50  a  week, 
and  if  it  did  not  occur  until  his  50th  year,  he  would  receive  about  $1.80  a  week. 

Medical  or  surgical  treatment  at  home  or  in  a  hospital  may  be  provided  when 
it  is  believed  that  an  insured  person  might,  without  such  treatment,  become  per- 
manently incapacitated.  If  such  person  has  150  weekly  contributions  to  his  credit, 
provision  may  be  made  for  the  payment  on  behalf  of  his  children  under  13  of  two- 
thirds  of  the  estimated  amount  of  the  invalidity  pension  to  which  he  may  be  entitled. 

Provision  is  also  made  for  the  granting  of  invalidity  and  old-age  pensions.  To 
persons  who  voluntarily  insure,  contributions  of  two  florins  ($0.80)  may  be  paid 
whenever  the  insured  desires,  but  no  more  than  80  contributions  are  to  be  taken 
into  account  for  any  year.  The  amount  of  the  pension  is  to  be  1.5  per  cent  of  each 
contribution  for  each  half-year  which  shall  have  elapsed  between  the  dates  of 
the  payment  of  the  contribution,  and  the  receipt  of  the  pension,  excluding,  how- 
ever, years  during  the  major  portion  of  which  invalidity  pension  was  received. 

An  annual  State  subsidy  of  10,000,000  florins  ($4,020,000)  is  to  be  paid  for  a 
period  of  75  years.  Before  1914  the  government  paid  the  districts  a  subsidy  of 
50  florins  ($'20. 10)  per  pension.  The  estimated  cost  for  1914  for  invalidity  pensions 
was  9,500,000  florins  ($3,819,000),  and  for  old-age  pensions  4,750,000  florins 
($1,909,500),  a  total  of  14,250,000  florins  ($5,728,500)  for  all  pensions  paid  in  1914. 
Pensions  are  paid  through  the  State  Insurance  Bank  and  Local  Labor  Councils. 

Greece.  A  compulsory  invalidity  and  old-age  insurance  act  was  passed  in 
1907.  It  is  restricted  to  Greek  sailors  and  the  cost  is  borne  in  equal  shares  by  the 
insured,  the  employer,  and  the  government.  No  statistics  as  to  the  operation  of  this 
act  are  available. 

Luxemburg.  Compulsory  invalidity  and  old-age  insurance  laws  were  parsed  in 
1911  and  1912.  All  persons  having  an  annual  income  of  not  less  than  3,000  marks 
($715)  must  insure.  The  pensionable  age  is  68  years.  Invalidity  is  defined  as 
inability  to  earn  two-thirds  of  normal  wage.  Institutional  care  to  prevent  per- 
manent invalidity  and  support  of  dependents  may  be  granted.  In  the  event  of 
death  before  a  pension  becomes  due,  death  benefits  may  be  paid  to  the  widow  or 
the  children  of  a  pensioner.  The  contributiors  are  at  the  rate  of  2.1  per  cent  of  ihe 
wage  earned,  and  are  paid  in  equal  shares  by  the  insured  and  the  employer.  The 
State  pays  a  subsidy  of  48  marks  ($11.43)  for  evary  insured  man  and  38.40  marks 
($9.15)  for  every  insured  woman.  Compulsory  insurance  may  be  augmented  by 


268  SOCIAL  INSURANCE.  [Feb. 

voluntary  insurance  for  persons  receiving  an  annual  income  not  exceeding  3,600 
marks  ($858). 

Iceland.  Under  a  law  dated  July  11,  1890,  a  compulsory  system  of  old-age 
and  invalidity  insurance  was  established.  All  servants  between  the  ages  of  20  and 
60,  all  day  laborers,  and  persons  working  with  their  parents  must  annually  con- 
tribute to  this  fund  1  krone  ($0.27)  for  men,  and  30  </>re  ($0.08)  for  women.  The 
male  head  of  each  household  must  pay  this  contribution  for  every  person  who 
resided  with  him  during  the  year,  but  he  may  deduct  it  from  the  wages  of  his 
employees.  For  non-payment  of  these  contributions,  property  may  be  attached. 
The  only  persons  exempt  from  paying  contributions  are  those  without  means  who 
are  responsible  for  maintaining  one  or  more  dependents  who  are  unable  to  provide 
for  themsehes;  those  unable  to  earn  wages  on  account  of  sickness  or  other  causes; 
and  those  who  have  provided  for  their  old  age  by  purchase  of  an  annuity  of  at  least 
150  kroner  ($40.20). 

Pensions  are  granted  to  persons  over  60  years  of  age  who  have  received  no  poor 
relief  during  a  prior  period  of  ten  years.  The  minimum  pension  is  20  kroner  ($5.36) 
and  the  maximum  pension  granted  may  not  exceed  200  kroner  ($53.60). 

For  the  first  10  years  after  the  establishment  of  these  relief  funds  all  contributions 
plus  accrued  interest  must  be  added  to  the  funds.  In  later  years  one-half  of  such 
contributions  plus  interest  is  added  to  the  funds,  while  the  remainder  is  distributed 
in  pensions. 

Funds  are  administered  in  cities  by  the  magistrates,  in  rural  communities  by  the 
parish  council,  and  these1  officials  may  set  aside,  as  their  salaries,  4  per  cent  of  all 
contributions  levied.  They  must  also  elect  two  persons  who  audit  the  annual 
balance  sheet  of  the  respective  funds. 

NON-CONTRIBUTORY  OLD-AGE  PENSIONS. 

Although  non-contributory  old-age  pension  systems  have  been  adopted 
in  only  a  very  few  countries,  the  operation  of  these  systems  is  being  con- 
sidered with  a  great  deal  of  interest,  particularly  since  the  passage,  in  1908, 
of  the  act  which  provided  for  the  payment  in  the  United  Kingdom  of  old- 
age  pensions  on  the  non-contributory  plan.  This  pension  scheme,  while 
not  yet  fully  perfected,  appears  to  have  worked  surprisingly  well,  and  it 
has,  therefore,  been  discussed  at  some  length.  Similar  systems,  previously 
adopted  in  Denmark,  New  Zealand,  Australia,  and  New  South  Wales, 
have  also  been  considered. 

This  form  of  old-age  relief  is  justified  by  its  advocates  on  the  ground 
that  all  persons  who  have,  for  a  considerable  portion  of  their  adult  lives, 
engaged  in  honorable  labor  are  entitled  to  freedom  from  anxiety  on 
account  of  their  physical  needs  during  their  declining  years.  Accord- 
ingly, in  all  such  systems  deserving  persons  only,  who  are  without  prop- 
erty or  sufficient  income  to  provide  for  immediate  necessities,  are  eligible 
to  receive  pensions. 

United  Kingdom.  The  British  old-age  pension  act  was  passed  in  1908  and 
revised  in  1911,  and  was  the  re&ult  of  earnest  consideration  for  at  least  twenty-five 
years  during  which  five  parliamentary  commissions  had  investigated  the  subject 
and  many  different  plans  had  been  proposed.  The  non-contributory  plan  was 
adopted  because  that  was  the  plan  favored  by  the  labor  party  and  because  there 
was  urgent  need  of  immediate  relief.  About  one-fifth  of  the  whole  population  of 
the  United  Kingdom  above  the  seventieth  year  were  actually  paupers  when  the 
act  was  passed,  and  it  was  recognized  that  no  plan  of  contributory  insurance  could 


1917.]  HOUSE  —  No.  1850.  269 

be  of  any  avail  to  those  who  were  already  aged.  Both  men  and  women,  married 
or  single,  over  seventy  years  of  age,  of  British  nationality,  who  for  12  years  out  of 
the  last  20  years  before  consideration  of  their  claims  have  been  resident  in  the 
United  Kingdom,  and  whose  annual  income  does  not  exceed  £31  10s.  ($153)  are 
eligible  for  pensions.  The  "character"  disqualifications  are: 

(1)  Habitual  refusal  to  work  according  to  ability,  opportunity  and  need. 

(2)  Imprisonment  for  crime  during  the  preceding  ten  years,  without  the  option  of  a  fine. 
Such  imprisonment  for  six  weeks  disqualifies  for  two  years  after  release,  imprisonment  for  a 
longer  period  disqualifies  for  ten  years. 

(3)  Conviction  under  the  inebriates  act,  which  disqualifies  for  six  months  unless  otherwise 
directed  by  the  judge.    Habitual  inebriety  may  disqualify  for  ten  years. 

(4)  Persons  under  detention  as  lunatics^and  inmates  of  institutions  where  board  and  lodging 
amounts  to  an  income  above  the  pensionable  limit  are  disqualified. 

More  important  in  actual  effect  than  any  of  the  foregoing  is  the  disqualification 
of  those  in  receipt  of  poor  relief,  except  medical  aid,  after  the  granting  of  a  pension. 
This  may  be  termed  a  "thrift"  test  since  it  assumes  that  a  pensioner  should  have 
some  means  of  his  own  to  supplement  his  pension.  Under  the  original  act  the 
receipt  of  poor  relief  by  any  dependent  of  a  pensioner  was  a  disqualification,  but 
the  amendment  of  1911  restricts  the  disqualification  to  the  pensioner  himself.  A 
pension  may  be  revoked  for  any  cause  which  would  disqualify  a  new  applicant. 

The  amount  of  the  pension  varies  with  the  pensioner's  income,  being  5s.  ($1.22) 
per  week  for  incomes  of  not  more  than  £21  ($102)  and  graded  in  such  a  way  that  the 
total  income  (including  the  pension)  shall  not  exceed  £34  ($165).  The  income  from 
any  property  is  reckoned  at  5  per  cent  per  annum  of  its  net  capital  value,  irrespective 
of  the  actual  income  therefrom.  In  the  case  of  a  married  couple,  the  income  of 
each  is  taken  to  be  one-half  of  the  total  income  of  both.  Nearly  all  pensions  (about 
94  per  cent  in  1912)  are  for  the  full  amount  of  5s.  ($1.22)  per  week. 

The  normal  pension  of  £13  (about  $63  a  year)  is  low  when  judged  by  an  American 
standard.  Still  it  is  notably  higher  than  the  average  German  old-age  or  invalidity 
pension  ($40  and  $48  respectively).  Moreover  an  aged  couple  in  Great  Britain 
receives  two  pensions,  whereas  in  Germany  such  couple  receives  but  a  single  pension. 
Thus  the  total  annuity  of  a  married  couple  is  nearly  three  times  as  large  in  the 
United  Kingdom  as  in  Germany. 

At  the  close  of  the  fiscal  year,  1914-1915,  the  number  of  pensioners  was  987,238, 
having  increased  from  647,494  in  1909,  and  from  the  outset  the  number  was  much 
greater  than  had  been  anticipated.  The  actual  enrollment  in  the  first  three  months 
exceeded  the  estimates  for  the  second  year  by  250,000.  This  great  discrepancy 
between  the  estimated  number  and  the  actual  number  shows  that  the  pension 
system  uncovered  much  unsuspected  poverty  among  the  aged.  It  was  supposed 
that  only  one-third  of  the  population  70  years  of  age  and  over  could  qualify  for  a 
pension,  but  as  a  matter  of  fact  624  out  of  each  1,000  persons  of  pensionable  age  in 
England  and  Wales  were  on  the  pension  rolls,  according  to  the  Census  of  1911. 
This  means  that  only  two  out  of  every  five  aged  persons  were  in  receipt  of  an  annual 
income  of  at  least  $153,  from  earnings  or  savings.  For  the  United  Kingdom  as  a 
whole,  the  proportion  was  637  per  1,000. 

The  great  increase  (over  200,000)  in  the  pension  roll  between  1910  and  1911  was 
due  to  the  removal  of  an  important  disqualification.  As  the  act  first  btood,  the 
receipt  of  poor  relief  at  any  time  after  January  1,  1908,  was  a  bar  to  the  granting 
of  a  pension.  The  removal  of  this  disqualification  at  the  close  of  1910  added 
160,000  names  to  the  pension  roll.  In  other  words,  160,000  persons  who  were  68 
years  of  age  or  over  in  1908,  received  poor  relief  before  attaining  the  age  of  70  years. 
This  is  rather  conclusive  evidence  that  the  pensionable  age  is  altogether  too  high. 

The  cost  of  pensions  has  increased  correspondingly.  Thus  during  the  fiscal 
year  1908-1909,  the  expenditure  was  £8,077,110,  12s.  ($39,307,259),  having  in- 
creased to  £12,315,061,  4s.  ($59,931,245)  for  the  fiscal  year,  1912-1913. 


270  SOCIAL  INSURANCE.  [Feb. 

The  present  "character"  and  "thrift"  tests  are  less  severe  than  under  the 
original  act;  nevertheless,  12,941  persons  were  disqualified  under  these  tests  during 
1913.  Of  this  number,  10,092  were  disqualified  because  of  receipt  of  poor  relief 
after  the  granting  of  a  pension.  In  some  cases  pensioners  preferred  to  be  maintained 
in  the  workhouse  to  subsisting  upon  such  a  small  pension  as  $1.22  per  week.  In 
other  cases,  there  was  a  deliberate  attempt  to  secure  both  forms  of  relief.  By 
means  of  "character"  and  "thrift"  tests  about  one  person  in  every  thirty  applicants 
is  disqualified.  One  of  the  arguments  advanced  by  advocates  of  an  old-age  pension 
was  that  the  cost  would,  to  a  large  extent,  be  offset  by  the  reduction  in  poor  relief, 
and  this,  in  a  measure,  has  been  found  to  result.  The  number  of  workhouse  (alms- 
hou^e)  inmates  70  years  of  age  and  over  in  England  and  Wales  has,  it  is  true, 
greatly  decreased,  but,  as  such  persons  are,  for  the  most  part,  physically  or  mentally 
unfit  to  maintain  an  independent  life,  even  with  the  aid  of  a  pension,  a  better  test 
is  afforded  by  the  number  of  persons  seventy  years  and  over  who  received  "out- 
relief."  The  decrease  in  the  number  of  actual  paupers  in  England  and  Wales 
since  1910  has  been  70.9  per  cent.  However,  the  old-age  pension  system,  while 
resulting  in  a  decreased  expenditure  on  account  of  almshouse  and  out-relief,  as 
such,  has  on  the  other  hand  added  greatly  to  the  budget  of  England  and  Wales, 
and  it  has  been  estimated  that  old-age  pensions  have  cost  at  least  four  times  as 
much  as  would  have  been  expended  under  the  former  systems  of  poor  relief. 

The  maximum  pension  of  £13  ($63  per  annum)  is  less  than  one-half  the  cost  of 
maintaining  a  workhouse  inmate  and  less  than  twice  the  cost  of  giving  "out-relief" 
to  the  same  individual.  The  great  increase  in  the  cost  of  old-age  pensions,  over 
poor  relief,  is,  accordingly,  due  to  increase  in  the  number  of  persons  relieved.  The 
pension  roll  of  England  and  Wales  on  March  31,  1915,  comprised  691,405  names, 
of  whom  3,413  received  institutional  care,  and  5,897  received  outdoor  relief,  both 
of  non-disqualifying  character.  The  old-age  pension  system,  therefore,  in  part 
replaces  poor  relief,  in  part  supplants  private  charity,  and  in  part  supplements 
incomes  too  small  for  proper  maintenance. 

The  principal  defects  of  the  old-age  pension  system  are  as  follows:  (1)  The 
maximum  pension  of  £13  ($63.26)  a  year  is  too  small  and  the  income  limit  for 
eligibility  of  £31  10s.  ($153)  a  year  is  too  low,  in  view  of  the  fact  that  the  cost  of 
living  has  risen  considerably  since  1906;  (2)  the  pensionable  age  of  70  is  too  high, 
for  the  reason  that  a  large  proportion  of  those  in  need  of  a  pension  become  incapable 
of  earning  a  living  long  before  reaching  70  years  of  age;  consequently  an  old-age 
pension  ought  to  be  granted  as  soon  as  one  becomes  unable  to  earn  a  living,  at 
whatever  age,  such  cases  being  but  partially  provided  for  by  disablement  benefits 
under  the  Insurance  Act.  Furthermore,  disablement  benefits  are  received  only  by 
insured  persons,  who  constitute  less  than  50  per  cent  of  the  population  over  16 
years  of  age  and  who  receive  an  income  of  less  than  £160  ($779). 

The  old-age  pension  act  is  administered  by  the  Local  Government  Board  under 
which  are  local  pension  committees  for  boroughs  and  urban  districts  and  paid 
district  pension  officers.  These  authorities  have  worked  together  very  conscien- 
tiously, and  have  displayed  tact  and  sympathy.  The  cost  of  administration  for 
1913  was  about  9s.  8d.  ($2.35)  for  every  £100  ($487)  of  pensions  granted,  or  less 
than  5  cents  for  every  dollar  distributed. 

Although  it  has  been  found  necessary  to  amend  the  old-age  pension  act  from 
time  to  time,  and  although  the  system  has  yet  to  be  perfected  in  certain  details,  it 
has  operated  quite  satisfactorily  even  during  the  short  experimental  period  of  less 
than  eight  years.  The  system  has  proved  to  be  a  source  of  real  blessing  to  the 
aged  and  deserving  poor,  not  only  because  of  its  provision  for  material  needs  late 
in  life,  but  because  it  removes  the  cause  of  great  anxiety  with  respect  to  their 
physical  needs  during  advancing  years. 

Denmark.  The  oldest  of  the  non-contributory  pension  systems  is  that  of 
Denmark,  which  dates  from  1891.  The  pension  age  (60  years)  is  the  lowest  fixed 
by  any  country.  The  income  and  property  qualification  is  rather  vague,  namely: 


1917.]  HOUSE  —  No.  1850.  271 

Inability  to  provide  one's  self  and  dependents  with  necessary  subsistence.  The 
required  residence  is  only  ten  years.  The  "character"  and  "thrift"  tests,  on 
the  other  hand,  are  unusually  rigorous.  No  one  shall  receive  a  pension  who  has 
ever  been  convicted  of  crime,  unless  subsequently  restored  to  civil  rights,  or  who 
has  received  any  poor  relief,  except  medical  aid,  for  one's  self  or  dependents,  during 
the  five  years  next  preceding  the  application  for  a  pension,  or  whose  own  poverty 
has  been  due  to  extravagance  or  disorderly  habits. 

The  amount  of  the  pension  is  not  determined  by  fixed  rules  but  varies  with 
individual  circumstances,  and  must  be  sufficient  for  support,  when  supplemented 
by  the  pensioner's  other  income.  In  computing  the  pensioner's  means  no  account 
is  taken  of  any  income,  ownership  of  dwelling,  etc.,  amounting  to  an  annual  income 
of  less  than  100  kroner  ($26.80).  In  contrast  with  Great  Britain,  New  Zealand, 
New  South  Wales  and  Australia,  where  man  and  wife  receive  separate  pensions, 
the  family  in  Denmark  is  treated  as  a  unit,  and  the  pension  granted  to  the  head 
of  a  family  is  for  the  support  of  himself  and  his  dependents.  The  average  pension 
increased  from  $27.23  in  1895  to  $42.89  in  1907,  this  increase  having  no  doubt 
been  made  in  consideration  of  the  increasing  cost  of  the  necessities  of  life. 

There  is  much  variation  in  the  amounts  of  pensions  granted  to  individuals, 
being  larger  for  heads  of  families  than  for  individuals,  and  higher  in  Copenhagen 
than  elsewhere.  Of  single  men  only  37.5  per  cent,  and  of  single  women  only  33.4 
per  cent  in  the  county  as  a  whole,  received  more  than  200  kroner  ($54)  during  the 
fiscal  year  1911-12.  The  total  number  of  beneficiaries  during  that  period  was 
79,340.  Of  this  number  16,710,  or  21  per  cent,  were  heads  of  families;  20,085,  or 
25  per  cent,  were  dependents  (mostly  wives);  9,356,  or  12  per  cent,  were  single 
men;  and  33,034,  or  42  per  cent,  were  single  women.  As  in  other  countries  the 
number  of  pensioners  has  increased  faster  than  the  population,  having  been  60,066 
in  1902  and  79,340  in  1911. 

This  increase  is  partly  due  to  the  removal  of  disqualifications  by  successive  amend- 
ments to  the  original  act  and  partly  to  a  greater  familiarity  with  the  provisions  of 
the  act,  but  more  particularly  to  the  great  desire  on  the  part  of  the  aged  to  avoid 
applying  for  poor  relief  between  the  fifty-fifth  and  the  sixtieth  year,  so  that  they 
may  be  eligible  to  receive  a  pension. 

Since  the  inauguration  of  the  system  the  aggregate  cost  has  increased  enormously. 
In  1912-13  the  country  spent  13,100,000  kroner  ($3,510,800)  as  compared  with 
2,600,000  kroner  ($696,800)  in  1892.  In  1913-14  the  total  net  disbursement  was 
14,013,954  kroner  ($3,755,740),  of  which  the  State  paid  7,054,354  kroner  ($1,890,567) 
the  cost  being  about  equally  divided  between  the  national  government  and  the 
communes. 

As  in  New  Zealand,  pensioners  who  are  unable  to^care  for  themselves  are  cared 
for  in  special  homes,  some  of  which  are  in  groups  of  detached  cottages,  others  are 
single  large  buildings.  The  inmates  are  und<>r  no  special  restraint  and  much  concern 
for  their  comfort  is  shown.  In  1911-12,  three  per  cent  of  the  total  number  of  pen- 
sioner were  cared  for  in  these  homes  at  a  cost  of  1,059,834  kroner  ($284,036). 

Old-age  pensions  are  administered  primarily  by  the  municipal  and  communal 
authorities,  under  whom  serve  paid  and  well-trained  inspectors.  The  Minister  of 
the  Interior  has  general  supervision  and  to  him  are  referred  appeals  from  decisions 
of  the  local  authorities.  As  the  authority  to  fix  the  amount  of  pensions  rests  with 
the  local  officials  the  amount  of  pensions  granted,  particularly  in  the  rural  com- 
munes, is  kept  rather  low  from  motives  of  economy,  resulting  in  some  dissatis- 
faction and  provision  for  appealing  from  such  decisions  is  therefore  made. 

New  Zealand.  The  New  Zealand  old-age  pension  system  was  established  in 
1898.  The  Act  was  amended  in  1905  so  as  to  provide  that  investigations  of  claims 
might  be  heard  in  private.  By  amendments  in  1912  and  1913  the  acts  relative 
to  widows'  and  military  pensions  were  merged  with  the  old-age  pension  act. 

All  persons,  65  years  of  age  and  over,  except  aliens  and  Maoris,  who  have  been 
citizens  for  at  least  three  years,  and  who  have  resided  in  New  Zealand  for  at  least 


272  SOCIAL  INSURANCE.  [Feb. 

25  years  (four  years  absence  being  allowed),  whose  property  does  not  exceed  £260 
($1,265),  and  whose  income  does  not  exceed  £60  ($292)  per  year,  or  whose  joint 
income  in  the  case  of  a  married  couple  does  not  exceed  £90  ($438),  are  eligible  to 
receive  a  pension,  provided  that  the  applicant  has  led  a  sober  and  reputable  life  for 
at  least  one  year  next  preceding  application,  has  not  been  imprisoned  for  as  much 
as  four  months  within  five  years,  or  for  as  much  as  five  years  within  25  years,  and 
has  not  deserted  his  (or  her)  family  within  12  years. 

The  amount  of  the  pension  is  £26  ($127)  per  annum,  less  £1  ($4.87)  for  every  £1 
of  income  over  £34  ($165)  and  for  every  £10  ($48.67)  of  net  property  above  £50 
($243) .  In  the  case  of  a  married  couple  it  is  estimated  jointly  and  equally  divided. 
Life  insurance  is  not  counted  as  property  and  income  from  property  is  disregarded 
(being  offset  by  the  property  limit).  A  pensioner  may  retain  a  homestead  to  the 
value  of  £650  ($3,163),  which  shall  revert  to  the  colony  at  the  death  of  the  pensioner. 
Parents  having  two  or  more  children  may,  in  case  of  need,  receive  a  pension,  —  in 
the  case  of  the  father  at  the  age  of  60  years,  and  in  the  case  of  the  mother  at  the 
age  of  55  years.  Such  pension  to  parents  is  the  same  in  amount  as  an  old-age 
pension,  but  may  be  increased  by  not  more  than  £13  ($63)  per  year  if  required  by 
circumstances.  Pensioners  who  require  institutional  care,  or  who  are  unable  to 
maintain  homes  for  themselves,  may  be  maintained  in  suitable  homes  or  hospitals. 
The  cost  of  maintenance  in  such  cases  is  deducted  from  the  pension. 

The  number  of  old-age  pensioners  at  the  close  of  the  fiscal  year  ending  in  1913 
was  16,509,  consituting  36  per  cent  of  the  entire  population  qualified  by  age  and 
residence  for  receipt  of  a  pension.  The  great  majority  (14,017)  were  receiving 
the  "normal"  pension  of  $127.  Only  32  were  receiving  parents'  pensions  above 
the  normal  amount.  The  total  amount  of  pensions  paid  during  the  fiscal  year  was 
£415,761  ($2,023,301)  or  7s.  lOd.  ($1.91)  per  capita.  On  March  31,  1915,  there 
were  in  force  19,352  pensions  which  represented  an  amount  of  £475,970  ($2,316,- 
308),  while  the  estimated  population,  exclusive  of  Maoris,  was  1,095,994  on  Decem- 
ber 31,  1914.  The  per  capita  cost  was  therefore  8s.  8d.  ($2.11)  in  1914. 

The  New  Zealand  old-age  pension  law  is  administered  by  a  Commissioner  of 
Pensions  and  by  district  Registrars,  most  of  whom  are  court  clerks.  Pensions  are 
paid  monthly,  in  advance,  through  the  post  office. 

It  must  be  said  that  the  pension  system  has  not  resulted  in  materially  reducing 
expenditures  in  the  form  of  public  charitable  aid,  but  it  has  tended  to  decrease 
voluntary  charitable  contributions,  for  the  reason  that  tax  payers  who  have  con- 
tributed toward  the  pension  funds  through  taxation  appear  to  be  disposed  to  reduce 
their  voluntary  contributions  to  public  charities. 

Australia.  The  Australian  invalid  and  old-age  pension  law  became  operative 
July  1,  1909.  Prior  thereto  the  separate  States  of  New  South  Wales,  Victoria  and 
Queensland  had  established  pension  systems  of  their  own,  so  that  the  Common- 
wealth Fund  took  over  some  60,000  pensioners  in  December,  1909,  when  the  separate 
systems  were  combined  in  a  single  system. 

The  Australian  law  is  very  similar  to  that  of  New  Zealand.  The  pension  age  is 
fixed  at  65  years  for  men  and  at  60  years  for  women.  The  residence,  race,  citizen- 
ship and  character  qualifications  are  similar  to  those  of  New  Zealand.  The  prop- 
erty limit  is  £310  ($1,509). 

An  invalidity  pension  is  payable  to  any  person  above  the  age  of  16  who  is  per- 
manently incapacitated  for  work  provided  that  he  (or  she)  shall  have  resided  in 
Australia  for  at  least  five  years,  is  not  receiving  an  old-age  pension,  has  no  claim 
upon  an  employer  for  accident  compensation,  has  become  permanently  incapaci- 
tated while  in  Australia,  did  not  purposely  produce  the  incapacity,  and  does  not 
have  property  or  income  in  excess  of  the  old-age  pension  limits. 

The  annual  pension  is  such  as  the  Commissioner  (or  Deputy  Commissioner)  of 
Pensions  in  each  case  "deems  reasonable  and  sufficient",  but  must  not  exceed  £26 
($127)  per  annum  nor  be  such  as  to  bring  the  pensioner's  total  income  above 
£52  ($253).  The  "normal"  pension  of  £26  ($127)  is  subject  to  a  deduction  of 


1917.]  HOUSE  —  No.  1850.  273 

£1  ($4.87)  for  every  £10  ($48.67)  of  net  property  above  £50  ($243)  exclusive  of  a 
homestead,  or  above  £100  ($487)  inclusive  of  a  homestead. 

The  number  of  old-age  pensioners  has  increased  out  of  all  proportion  to  the 
increase  of  population,  the  percentages  of  increase  from  1910  to  1913  having  been 
26.65  for  pensioners  and  9.95  for  population.  This  is  due  in  part  to  an  increasing 
proportion  of  old  people  (immigration  of  young  and  middle-aged  persons  having 
decreased  in  proportion  to  the  total  population),  and  in  part  to  a  lowering  of  the 
age  requirement  for  women  from  65  to  60  years  at  the  close  of  1910.  There  was  also 
a  small  increase  attributable  to  a  wider  knowledge  of  the  pension  plan  and  to  the 
dispelling  of  the  impression  that  the  receipt  of  an  old-age  pension  implies  pauperism. 

Invalidity  pensions  are  also  granted  in  Australia,  and,  as  respects  aged  bene- 
ficiaries, they  are  virtually  (as  in  Germany)  old-age  pensions,  and  should  be  con- 
sidered in  this  connection.  On  July  30,  1913,  the  number  of  old-age  pensions  in 
force  was  82,943,  and  the  number  of  invalidity  pensions  was  13,739.  The  total 
amount  paid  in  pensions  during  the  fiscal  year  ending  June  30, 1913,  was  £2,289,048 
($11,139,652)  representing  a  per  capita  amount  distributed  fortnightly  to  these 
pensioners  of  19s.  6d.  ($4.74).  The  cost  of  administration  was  about  2  per  cent  of 
the  total  amount  distributed. 

The  Australian  act  is  administered  by  a  Commissioner  of  Pensions  with  the 
assistance  of  a  deputy  in  each  State  and  of  local  Registrars. 

New  South  Wales.  The  Old-Age  Pension  Act  became  operative  on  August  1, 
1901,  but  virtually  became  inoperative  on  July  1,  1909,  when  that  portion  of  the 
Commonwealth  Invalidity  and  Old  Age  Pension  Act  relating  to  old-age  pensions 
for  men  went  into  effect.  An  act  relative  to  women,  60  years  of  age  and  over, 
became  operative  on  December  15,  1910. 

The  conditions  governing  the  payment  of  a  pension  vary  slightly  from  those 
established  under  the  State  act.  The  pensionable  age  is  60  years  for  women  and  for 
permanently  incapacitated  men  and  65  years  for  other  men.  Pensioners  must  have 
been  in  residence  for  at  least  20  years  except  that  absences  aggregating  one-tenth 
of  total  period  of  residence  are  not  considered.  Aliens  and  aborigines  are  disqualified. 
The  maximum  amount  of  a  pension  is  £26  ($127),  but  income  and  pension  com- 
bined must  not  exceed  £52  ($253) ;  possession  of  a  home  and  gifts  or  allowances 
are  not  included  in,  income. 

On  June  30,  1914,  the  number  of  persons  receiving  old-age  pensions  was  32,165, 
of  whom  14,217  were  men  and  17,948  were  women.  The  per  capita  fortnightly 
pension  was  19s.  5d.  ($4.72).  During  the  fiscal  year  ending  in  1914  the  Common- 
wealth paid  for  invalidity  and  old-age  pensions  a  total  of  £2,579,265  ($12,551,993), 
the  administrative  cost  having  been  £46,946  ($22&,463),  and  for  the  asylum  care 
of  pensioners  a  total  of  £14,236  ($69,279).  The  number  of  old-age  pensions  per 
1,000  of  population  increased  from  17.3  per  cent  in  1913  to  17.5  per  cent  in  1914, 
while  there  was  an  increase  in  1914  of  £290,217  ($1,412,341)  in  the  total  amount 
paid  for  pensions  and  an  increase  of  £2,423  ($11,792)  in  the  cost  of  administration. 


274  SOCIAL  INSURANCE.  [Feb. 


APPENDIX    C. 


UNEMPLOYMENT. 

AN    ACT    TO    ESTABLISH    A    STATE    BOARD    OF    EMPLOYMENT. 

1  SECTION  1.    There  shall  be  appointed  by  the  governor  with  the 

2  advice  and  consent  of  the  council,  five  persons  to  serve  on  a  board 

3  to  be  known  as  the  state  board  of  employment.    The  said  board  shall 

4  serve  without  compensation,  and  shall  consist  of  two  employers  of 

5  labor,  two  representatives  of  employees  and  one  woman  known  to 

6  be  interested  in  economic  and  industrial  matters.     Two  members 

7  shall  be  appointed  to  serve  for  a  term  of  three  years,  two  for  a  term 

8  of  two  years  and  one  for  a  term  of  one  year.    The  governor  shall 

9  designate  one  member  of  the  board  as  chairman. 

1  SECTION  2.    The  board  shall  choose  a  secretary  whose  salary  shall 

2  be  fixed  by  it  and  whose  duty  shall  be  to  maintain  an  office  for  the 

3  purpose  of  keeping  office  records  and  compiling  other  information 

4  necessary  and  incidental  to  the  proper  development  and  maintenance 

5  of  the  board. 

1  SECTION  3.    All  the  powers  and  duties  in  connection  with  the 

2  supervision  of  employment  offices  and  labor  now  vested  in  the  di- 

3  rector  of  the  bureau  of  statistics  by  chapter of  the  acts  of 

4  the  year ,  and  all  acts  in  amendment  thereof  and  in  addition 

5  thereto,  are  hereby  transferred  to  the  state  board  of  employment. 

6  Any  investigation,  examination,  proceeding  or  appeal  undertaken, 

7  begun  or  instituted  by  or  before  the  bureau  of  statistics  prior  to  the 

8  taking  effect  of  this  act  may  be  conducted  and  continued  to  a  termi- 

9  nation  by  the  state  board  of  employment  in  the  same  manner  and 

10  under  the  same  terms  and  conditions  and  with  the  same  effect,  as  if 

11  the  jurisdiction  of  the  director  of  the  bureau  of  statistics  had  not 

12  been  terminated.    The  four  employment  offices  now  under  the  care 

13  and  direction  of  the  director  of  the  bureau  of  statistics  shall  be  given 

14  over  to  and  maintained  by  the  state  board  of  employment,  and  the 

15  state  board  of  employment  shall  have  power  to  further  organize  and 

16  establish  additional  state  employment  offices  in  any  city  or  town  of 

17  the  commonwealth  where  it  deems  such  offices  necessary. 

1  SECTION  4.     It  shall  be  the  duty  of  the  said  board  to  study  labor 

2  conditions  and  to  keep  in  touch  with  labor  affairs  throughout  the 


1917.]  HOUSE  —  No.  1850.  275 

3  United  States  and  Europe,  and,  in  addition  to  reporting  to  the  legis- 

4  lature  annually,  to  make  such  other  recommendations  as  they  deem 

5  wise  for  the  purpose  of  equalizing  and  properly  distributing  labor  so 

6  as  to  prevent  unemployment  as  far  as  possible.    In  cases  of  periods 

7  of  unemployment,  however,  the  board  shall  have  the  power  to  recom- 

8  mend  legislation  providing  for  special  state  work  under  the  supervision 

9  of  the  proper  officials,  and  also  to  recommend,  if  necessary,  special 
10  legislation  providing  for  such  exigencies. 

1  SECTION  5.    There  shall  be  allowed  and  paid  out  of  the  treasury  of 

2  the  commonwealth  for  the  salary  of  the  secretary  and  other  contingent 

3  expenses  in  connection  with  the  work  of  the  said  board  and  the  estab- 

4  lishment  and  maintenance  of  the  state  employment  offices  hereinbefore 

5  mentioned  such  sums  as  the  general  court  may  annually  appropriate 

6  for  said  purposes. 

1  SECTION  6.    The  licenses  to  maintain  employment  offices  shall  be 

2  granted  by  the  board  of  employment  and  shall  be  of  such  classes  and 

3  shall  be  given  on  such  conditions  and  for  such  license  fees  as  the  board 

4  may  from  time  to  time  determine:  provided,  however,  that  the  fees 

5  for  each  class  of  license  shall  be  uniform  and  that  no  fee  under  five 

6  dollars  or  over  fifty  dollars  shall  be  required.     Every  applicant  for 

7  a  license  shall  file  with  the  board  of  employment  a  written  application 

8  containing  such  information  as  said  board  may  require.    Upon  the 

9  filing  of  said  application  a  license  may  be  granted,  if  upon  investiga- 

10  tion  the  provisions  of  this  act  and  regulations  made  thereunder  have 

11  been  complied  with:  provided,  however,  that  no  application  shall  be 

12  rejected  until  the  applicant  has  been  notified  in  writing  of  the  reasons 

13  for  such  rejection,  and  has  been  given  a  hearing  before  said  board 

14  if  he  so  requests  and  a  reasonable  opportunity  to  disprove  the  fact  or 

15  or  facts  upon  which  such  rejection  is  based. 

1  SECTION  7.     In  cities,  no  license  shall  be  issued  until  the  applicant 

2  shall  have  filed  with  the  board  of  employment  and  bonded  in  the 

3  penal  sum  of  five  hundred  dollars  with  two  sufficient  sureties  or  one 

4  corporate  surety,  to  be  approved  by  said  bureau.    The  condition  of 

5  the  bond  shall  be  that  said  applicant  shall  repay  all  fees  collected 

6  by  him  in  violation  of  the  provisions  of  this  act  or  rules  adopted  here- 

7  under,  and  shall  also  refund  all  fees  collected  by  him,  and  shall  pay 

8  all  transportation  expenses  incurred  by*  employees  as  far  as  such  re- 

9  funds  and  payments  under  the  circumstances  of >  the  case  may  be 

10  required  by  the  provisions  of  this  act  or  the  terms  of  any  contract 

11  entered  into  by  him.    Such  bonds  shall  be  made  payable  to  the  com- 

12  monwealth  of  Massachusetts,  but  any  person  having  a  claim  against 

13  any  licenses  which  is  covered  by  the  condition  of  the  bond  hereby 

14  required  may,  with  the  consent  of  the  chairman  of  the  board  of  employ- 


276  SOCIAL  INSURANCE.  [Feb. 

15  merit,  bring  suit  in  his  own  name  upon  the  bond  filed  by  said  licensee 

16  against  the  principal  and  sureties  or  surety  therein  named,  and  recover 

17  the  amount  due  him. 

1  SECTION  8.     Licenses  may  be  renewed  from  year  to  year  by  the 

2  board  of  employment  on  payment  of  the  regular  license  fee  and  by 

3  filing  a  new  bond,  but  the  board  of  employment,  for  good  and  sufficient 

4  reason  and  after  a  hearing,  may  refuse  to  renew  or  may  revoke  any 

5  license. 

1  SECTION  9.     Every  licensee  shall  keep  records  or  registers  in  such 

2  form  and  giving  such  information  as  the  board  of  employment  may 

3  direct.     Such  records  or  registers  shall  be  subject  to  inspection  by 

4  said  board  or  its  agents,  and  the  information  therein  contained  shall 

5  be  furnished  to  the  board  at  such  times  and  in  such  form  as  the  board 

6  may  require. 

1  SECTION  10.    No  licensee  hereunder  and  no  agent  of  any  licensee 

2  shall  pay,  rebate  or  remit  to  any  employer  or  any  agent  of  any  employer 

3  any  part  of  any  fee  paid  or  pavable  to  such  licensee  with  reference  to 

4  such  employer  or  agent  or  any  sum  or  valuable  consideration  of  any 

5  kind  in  connection  with,  or  in  return  for,  the  employment 'of  any  em- 

6  ployee;  or  persuade,  induce,  or  procure,  or  attempt  to  persuade,  in- 

7  duce  or  procure,  any  such  employer  or  agent  to  discharge  an  employee; 

8  or  knowingly  bring  about  or  assist  in  the  employment  of  any  minor 

9  in  violation  of  the  laws  relating  to  the  employment  of  minors;  or  know- 

10  ingly  permit  any  prostitute,  gambler,  intoxicated  person,  procurer  or 

11  person  of  bad  character  to  enter  or  remain  in  the  employment  office 

12  conducted  by  such  licensee. 

1  SECTION  11.     Every  licensee  hereunder  shall  post  in  a  conspicuous 

2  place  in  every  room  used  for  business  purposes  in  the  employment 

3  offices  conducted  by  him  a  schedule  showing  clearly  the  amount,  rates 

4  and  classification  of  the  fees  to  be  charged,  both  to  employees  and 

5  employers,  with  reference  to  all  kinds  of  employment  as  to  which  such 

6  licensee  proposes  to  act  as  employment  agent.    A  copy  of  the  schedule 

7  so  posted  shall  be  sent  to  the  board  of  emplojTnent,  and  no  licensee 

8  hereunder  shall  charge  or  receive  in  return  for  services  rendered  or  to 

9  be  rendered  as  an  employment  agent  any  fee,  commission,  gift,  or 

10  valuable  consideration  of  any  kind  whatever,  except  a  fee  in  money 

11  to  the  amount  stated  in  such  schedule.    The  schedule  so  posted  may 

12  be  changed  at  any  time:  providing,  that  a  copy  of  such  changes  shall 

13  be  sent  to  said  board  of  employment  at  least  one  month  before  such 

14  changes  are  posted  or  acted  upon. 

1  SECTION  12.     No  person  shall  conceal  or  misrepresent  the  amount 

2  of  wages  paid  by  him  to  an  employee,  or  received  by  him  from  an 


1917.]  HOUSE  —  No.  1850.  277 

3  employer,  for  the  purpose  of  reducing  the  amount  of  any  fee  paid  to 

4  a  licensee  hereunder  in  connection  with  the  employment  in  which 

5  such  wages  are  paid,  or  fraudulently  apply  to  any  licensee  for  em- 

6  ployment  or  for  an  employee  for  the  purpose  of  assisting  another 

7  person  to  obtain  the  employment  or  employee  suggested  by  a  licensee 

8  in  consequence  of  such  application  without  the  payment  of  any  fee. 

1  SECTION  13.     If  a  licensee  hereunder  violates  any  of  the  provisions 

2  of  section of  this  act  he  shall  be  punished  by  a  fine  of  not 

3  more  than  two  hundred  dollars  for  each  offence,  and  if  he  violates 

4  any  of  the  other  provisions  of  this  act  or  any  rules  adopted  hereunder 

5  he  shall  be  punished  by  a  fine  of  not  more  than  fifty  dollars  for  each 

6  offense;  and  for  any  violation  his  license  may  be  revoked. 

1  SECTION  14.    This  act  shall  take  effect  on  the  first  day  of  August 

2  in  the  year  nineteen  hundred  and  seventeen. 


UNEMPLOYMENT   IN   THE   ORGANIZED   INDUSTRIES   IN   MASSACHUSETTS, 

1908-1916. 

During  the  financial  depression  which  occurred  during  the  winter  of 
1907-1908,  as  a  result  of  which  a  very  large  number  of  wage-earners  were 
thrown  out  of  employment,  it  was  found  that  there  was  no  fund  of  infor- 
mation available  which  would  serve  as  an  adequate  measure  of  the  amount 
of  unemployment  which  then  existed  as  compared  with  the  amount  of 
unemployment  during  normal  years.  The  Director  of  the  Bureau  of 
Statistics,  therefore,  after  a  careful  examination  of  statistical  data  bearing 
on  the  subject  of  unemployment  which  were  being  collected  in  foreign 
countries  and  in  the  State  of  New  York,  inaugurated  in  Massachusetts 
the  plan  of  collecting  from  organized  wage-earners  quarterly  statistics 
showing  the  percentages  of  the  unemployed  among  the  members  of  trade 
unions  in  the  State,  and  this  plan  has  since~been  consistently  followed, 
so  that  at  the  present  time  a  series  of  comparable  statistics  based  on 
reports  from  labor  organizations  for  the  period  1908  to  the  close  of  the 
third  quarter  in  1916  is  now  available.  By  courtesy  of  the  Director  of 
that  Bureau  we  are  enabled  in  this  report  to  present  a  summary  of  the 
information  thus  obtained  in  the  form  of  a  series  of  statistical  tables, 
together  with  two  charts,  the  one  representing  facts  obtained  for  Massa- 
chusetts with  corresponding  information  for  the  United  Kingdom,  Ger- 
many, and  New  York  State,  and  the  other  showing  for  the  principal 
industries  of  the  State  the  fluctuations  in  unemployment  in  Massachusetts. 

In  order  that  the  significance  of  the  data  presented  herein  may  be  clearly 
understood,  it  should  be  pointed  out  that  the  percentages  are  based  upon 
reports  received  from  the  secretaries  of  labor  organizations,  and  have 
reference  only  to  organized  labor.  The  number  of  reports  received  at  the 
close  of  September,  1916,  was  1,021,  representing  an  aggregate  member- 


278 


SOCIAL  INSURANCE. 


[Feb. 


ship  of  180,557,  or  about  75  per  cent  of  the  total  number  of  organized 
wage-earners  in  the  Commonwealth.  While  the  facts  are  believed  to  be 
representative  of  employment  conditions  as  respects  organized  labor  in 
the  State,  no  claim  is  made  by  the  Bureau  that  the  facts  are  more  than 
fairly  representative  of  employment  conditions  among  the  entire  wage- 
earning  population,  organized  and  unorganized.  Some  authorities  hold 
that,  particularly  in  times  of  depression,  there  is  a  greater  amount  of 
unemployment  among  the  unorganized  than  among  the  organized  wage- 
earners,  while  others,  on  the  contrary,  hold  that  the  organized  em- 
ployees, because  of  their  insistence  upon  the  maintenance  of  a  standard 
scale  of  wages  and  hours  of  labor,  are  the  first  to  be  thrown  out  of  em- 
ployment when  an  industrial  depression  renders  it  necessary  for  employers 
to  reduce  their  labor  costs.  Whatever  the  relative  merits  of  these  two 
points  of  view,  it  seems  reasonable  to  assume  that,  notwithstanding  the 
fact  that  the  absolute  percentages  of  unemployment  which  are  derived 
from  trade  union  returns  may  not  be  fully  representative  of  general  con- 
ditions for  the  entire  wage-earning  population,  nevertheless,  the  fluctua- 
tions in  the  trade  union  percentages  may  be  considered  as  indicative  of 
changes  in  industrial  conditions,  serving  as  a  trustworthy  measure  of  the 
unemployment  prevailing  at  any  one  time.  A  discussion  of  the  statis- 
tical returns  and  charts  prepared  by  the  Bureau  of  Statistics  follows. 


A.    SUMMARY  OF  QUARTERLY  REPORTS  RECEIVED  FROM  LABOR  ORGAN- 
IZATIONS IN  MASSACHUSETTS  DURING  THE  YEARS  1908-1916. 

The  following  comparative  statement  shows  the  number  and  member- 
ship of  the  organizations  reporting  at  the  close  of  each  quarter,  since  the 
collection  of  the  unemployment  returns  in  Massachusetts  was  inaugu- 
rated; also  the  number  of  members  unemployed,  and  the  corresponding 
percentages. 

TABLE  I. — Number  and  Membership  of  Organizations  Reporting  and  Number 
of  Members  Unemployed,  1908-1916,  with  Corresponding  Percentages. 


UNEMPLOYED 

NUMBER  RE- 

UNEMPLOYED — 

OWING  TO  LACK 

PORTING. 

ALL  CAUSES. 

OF  WORK 

1    QUARTERS  ENDING  — 

OR  MATERIAL. 

Unions. 

Member- 
ship. 

Mem- 
bers. 

Percent- 
ages. 

Mem- 
bers. 

Percent- 
ages. 

March  31,  1908,  . 

256 

66,968 

11,987 

17.9 

10,832 

16.2 

June  30,  1908  
September  30,  1908,   . 

493 
651 

72,815 
83,969 

10,490 
8,918 

14.4 
10.6 

9,128 
7,349 

12.5 
8.8 

December  31,  1908,    . 

770 

102,941 

14,345 

13.9 

11,302 

11.0 

March  31,  1909,  . 

777 

105,059 

11,997 

11.4 

9,980 

9.5 

June  30,  1909  

780 

105,944 

6,736 

6.4 

4,913 

4.6 

September  30,  1909,   . 

797 

113,464 

5,451 

4.8 

3,873 

3.4 

December  31,  1909,    . 

830 

107,689 

10,084 

9.4 

5,248 

4.9 

March  31,  1910,  . 

837 

117,082 

8,262 

7.1 

6,186 

5.3 

June  30,  1910,     .... 
September  30,  1910,   . 

841 
845 

121,849 
118,781 

8,518 
6,624 

7.0 
5.6 

6,570 
4,687 

5.4 
4.0 

December  31,  1910,     . 

862 

122,621 

12,517 

10.2 

8,938 

7.3 

1917.] 


HOUSE  —  No.  1850. 


279 


TABLE  I.  —  Number  and  Membership  of  Organizations,  etc.  —  Concluded. 


UNEMPLOYED 

NUMBER  RE- 

UNEMPLOYED — 

OWING  TO  LACK 

PORTING. 

ALL  CAUSES. 

OF  WORK 

QUARTERS  ENDING  — 

OR  MATERIAL. 

Unions. 

Member- 
ship. 

Mem- 
bers. 

Percent- 
ages. 

Mem- 
bers. 

Percent- 
ages. 

March  31,  1911  

889 

122,002 

12,738 

10.4 

9,120 

7.5 

June  30,  1911,     .... 

897 

135,202 

8,927 

6.6 

5,669 

4.2 

September  30,  1911,   . 

975 

133,540 

7,527 

5.6 

4,904 

3.7 

December  30,i  ign(  . 

905 

125,484 

12,167 

9.7 

7,568 

6.0 

March  30,  1  1912, 

942 

161,825 

22,738 

214.1 

8,185 

5.1 

June  29,i  1912,   .... 

974 

134,940 

7,088 

5.3 

4,540 

3.4 

September  30,  1912,   . 

972 

146,673 

6,952 

4.7 

4,407 

3.0 

December  31,  1912,    . 

994 

174,359 

15,914 

9.1 

11,164 

6.4 

March  31,  1913  

1,022 

170,970 

19,329 

11.3 

12,493 

7.3 

June  30,  1913  

1,037 

172,343 

11,116 

6.4 

7,473 

4.3 

September  30,  1913,   . 

1,059 

177,267 

12,010 

6.8 

7,537 

4.3 

December  31,  1913,    . 

1,081 

178,182 

18,574 

10.4 

13,069 

7.3 

March  31,  1914  

1,082 

173,327 

22,347 

12.9 

15,917 

9.2 

June  30,  1914  

1,095 

183,202 

18,122 

9.9 

12,576 

6.9 

September  30,  1914,   . 

1,010 

166,816 

18,302 

11.0 

14,140 

8.5 

December  31,  1914,    . 

1,024 

165,762 

30,258 

18.3 

24,629 

14.9 

March  31,  1915  

1,076 

171,997 

28,486 

16.6 

21,951 

12.8 

June  30,  1915,     .... 

1,092 

162,315 

17,262 

10.6 

12,241 

7.6 

September  30,  1915,    . 

1,052 

175,754 

12,328 

7.0 

6,325 

3.6 

December  31,  1915,    . 

1,026 

168,122 

14,389 

8.6 

6,709 

4.0 

March  31,  1916  

1,029 

178,434 

15,484 

8.6 

7,010 

3.9 

June  30,  1916  

1,017 

173,179 

7,358 

4.2 

2,323 

1.3 

September  30,  1916,   . 

1,021 

180,557 

7,046 

3.9 

3,358 

1.9 

Average  for  1908, 

_ 

_ 

_ 

U.» 

_ 

12.1 

Average  for  1909, 

- 

- 

- 

8.0 

- 

6.6 

Average  for  1910, 

— 

_ 

_ 

7.5 

_ 

6.5 

Average  for  1911, 

- 

- 

- 

8.1 

- 

6.4 

Average  for  1912, 

— 

— 

— 

8.S 

— 

4.5 

Average  for  1913, 

— 

_ 

_ 

8.7 

_ 

5.8 

Average  for  1914, 

_ 

_ 

_ 

13.0 

_ 

9.9 

Average  for  1915, 

- 

- 

_ 

10.7 

_ 

7.0 

Average  for  1916, 

" 

~ 

— 

~ 

~ 

~ 

In  the  above  table,  facts  are  presented  not  only  with  reference  to  the 
percentages  of  unemployed  for  all  causes,  but  also  the  percentages  rep- 
resenting the  numbers  unemployed  because  of  lack  of  work  or  material. 
The  latter  percentages  indicate  more  adequately  the  condition  of  the 
labor  market  than  the  former,  because  such  factors  as  unfavorable  weather, 
strikes  and  lockouts,  disability,  and  other  causes,  which  have  no  special 
significance  as  indices  of  general  prosperity  or  depression,  are  eliminated. 
For  this  reason  the  percentages  unemployed  owing  to  lack  of  work  or  ma- 
terial may  more  properly  be  discussed  in  this  connection. 

On  reference  to  the  last  column  in  the  above  table,  it  will  be  observed 
that  the  percentage  (16.2)  unemployed  at  the  close  of  March,  1908,  because 
of  lack  of  work  or  material  was  the  highest  percentage  recorded  during 
the  entire  period  1908-1916,  indicating  that  the  industrial  depression 

1  Owing  to  the  fact  that  the  respective  dates  —  December  31, 1911,  March  31, 1912,  and  June  30, 
1912  —  fell  on  Sunday,  the  date  chosen  for  the  returns  in  each  case  was  the  day  preceding. 

2  In  explanation  of  this  unusually  high  percentage  unemployed  for  all  causes  it  should  be  stated 
that  over  9,000  organized  textile  workers  in  Lowell  who  were  involved  in  a  strike  pending  on 
March  30  were  included  in  the  aggregate  number  reported  as  unemployed  on  that  date. 


280 


SOCIAL  INSURANCE. 


[Feb. 


during  the  winter  of  1907-1908  was  rather  more  severe  than  that  of  the 
winter  of  1914-1915,  when  the  corresponding  percentage  for  the  close  of 
December,  1914,  was  14.9,  and  for  the  close  of  March,  1915,  was  12.8. 
Another  significant  fact  brought  out  by  the  percentages  is  that  the  per- 
centages for  the  close  of  December  and  March  in  each  year  are  uniformly 
higher  than  the  corresponding  percentages  for  the  close  of  June  and 
September  of  the  respective  years.  This  fluctuation  represents  seasonal 
inactivity  which  is  confined  largely  to  the  building  trades. 

B.    CAUSES  OF  UNEMPLOYMENT.- 

In  Table  II  an  endeavor  has  been  made  to  analyze  the  unemployment 
statistics  so  as  to  show  the  relative  weight  which  the  number  of  unem- 
ployed for  any  single  cause  bears  in  the  aggregate  number  of  unemployed. 


TABLE  II.  —  Percentage  Unemployed,  1908-1916:   By  Causes. 


QUARTERS  ENDING  — 

Ail 
Causes. 

Lack  of 
Work  or 
Material. 

Unfavor- 
able 
Weather. 

Strikes 
or 
Lockouts. 

Dis- 
ability. 

Other 
Causes.  l 

March  31,  1908,    . 

17.9 

16.2 

0.2 

0.7 

0.7 

0.1 

June  30,  1908  

14.4 

12.5 

0.1 

0.3 

1.2 

0.3 

September  30,  1908,     . 

10.6 

8.7 

20.0 

0.5 

1.2 

0.2 

December  31,  1908,      . 

13.9 

11.0 

0.5 

0.7 

1.2 

0.5 

March  31,  1909,    . 

11.4 

9.5 

0.1 

0.2 

1.3 

0.3 

June  30   1909,       .... 

6.4 

4.6 

20.0 

0.3 

1.2 

0  3 

September  30,  1909,     . 

4.8 

3.4    • 

0.1 

0. 

1.1 

0.1 

December  31,  1909,      . 

9.4 

4.9 

2.4 

0. 

1.2 

0.8 

March  31,  1910  

7.1 

5.3 

0.1 

0. 

1.4 

0.2 

June  30,  1910  

7.0 

5.4 

20.0 

0. 

1.2 

0.3 

September  30,  1910,     . 

5.6 

4.0 

0.1 

0. 

1.3 

0.1 

December  31,  1910,      . 

10.2 

7.3 

1.2 

0. 

1.2 

0.4 

March  31,  1911,    . 

10.4 

7.5 

0.7 

0.1 

1.4 

0.7 

June  30,  1911  

6.6 

4.2 

0.2 

0.5 

1.2 

0.5 

September  30,  1911,     . 

5.6 

3.7 

0.2 

0.3 

1.2 

'  0.2 

December  30,'  1911,    . 

9.7 

6.0 

1.6 

0.1 

1.3 

0.7 

March  30,  «  1912  

14.1 

5.1 

1.0 

6.3 

1.3 

0.4 

June  29,  »  1912,     .... 

5.3 

3.4 

20.0 

0.4 

1.3 

0.2 

September  30,  1912,     . 

4.7 

3.0 

0.1 

0.3 

1.2 

0.1 

December  31,  1912,      . 

9.1 

6.4 

0.6 

0.6 

1.2 

0.3 

March  31,  1913,    . 

11.3 

7.3 

0.5 

1.6 

1.4 

0.5 

June  30,  1913  

6.4 

4.3 

0.1 

0.7 

1.2 

0.1 

September  30,  1913,     . 

6.8 

4.3 

0.5 

0.6 

1.2 

0.2 

December  31,  1913,      . 

10.4 

7.3 

0.7 

0.5 

1.4 

0.5 

March  31,  1914,    . 

12.9 

9.2 

0.7 

0.6 

1.6 

0.8 

June  30,  1914  
September  30,  1914,     . 

9.9 
11.0 

6.9 

8.5 

0.3 
0.2 

0.7 
0.5 

1.2 
1.5 

0.8 
0.3 

December  31,  1914,      . 

18.3 

14.9 

1.1 

0.1 

1.5 

0.7 

March  31,  1915,    . 

16.6 

12.8 

0.4 

1.0 

1.9 

0.5 

June  30   1915 

10  6 

7  6 

0  7 

0  6 

1  5 

0  2 

September  30,  1915,     . 

7.0 

3.6 

0.6 

1.2 

1.4 

0.2 

December  31,  1915,      . 

8.6 

4.0 

1.1 

1.5 

1.8 

0.2 

March  31,  1916,    . 

8.6 

3.9 

1.0 

1.9 

1.6 

0.2 

June  30,  1916  
September  30,  1916,     . 

4.2 
3.9 

1.3 
1.9 

0.3 
0.1 

0.8 
0.3 

1.5 
1.5 

0.3 
0.1 

1  Including  vacations,  temporary  shut-downs  for  repairs,  stock-taking,  etc. 
.    J  Less  than  0.05  per  cent. 

»  Owing  to  the  fact  that  the  respective  dates  —  December  31, 1911,  March  31,  1912,  and  June  30, 
1912  —  fell  on  Sunday,  the  date  chosen  for  the  returns  in  each  case  was  the  day  preceding. 


1917.]  HOUSE  —  No.  1850.  281 

The  principal  cause  of  unemployment  at  the  close  of  each  quarter,  as 
shown  in  the  table,  is  almost  invariably  lack  of  ivork  or  material,  and  as 
has  already  been  stated,  these  percentages  indicate  primarily  the  condi- 
tions of  the  labor  market,  and  special  significance  may,  therefore,  be  at- 
tached to  the  fluctuations  observed. 

The  percentages  unemployed  on  account  of  weather  usually  show  but 
little  fluctuation  except  at  the  end  of  the  last  quarter,  and  occasionally 
at  the  close  of  the  first  quarter  of  each  year. 

Except  for  the  high  percentage  (6.3)  unemployed  ~on  account  of  strikes 
or  lockouts  at  the  close  of  March,  1912  (due  principally  to  a  succession 
of  strikes  of  textile  workers,  of  which  those  in  Lawrence  and  Lowell  are 
most  memorable),  there  were  no  considerable  fluctuations  in  these  per- 
centages during  the  period  under  consideration.  In  no  other  instance 
did  the  percentage  unemployed  for  this  cause  exceed  1.9  —  the  percentage 
for  the  close  of  March,  1916. 

C.    UNEMPLOYMENT  IN  MUNICIPALITIES. 

On  examination  of  the  percentages  unemployed  for  the  leading  cities 
in  the  State,  it  appears  that  in  Boston,  which  city  ordinarily  includes 
fully  one-third  of  the  total  membership  reporting  each  quarter,  and  in 
which  there  is  a  fairly  general  representation  of  all  organized  industries 
and  occupations  in  the  State,  the  percentages  unemployed  correspond 
rather  closely  with  the  percentages  unemployed  for  the  State  as  a  whole. 
The  usual  increase  in  unemployment  during  the  winter  months,  which 
is  reflected  in  the  percentages  for  the  State  as  a  whole,  is  true  also  of  the 
percentages  for  the  city  of  Boston.  With  few  exceptions,  however,  the 
other  leading  cities  in  the  State  show  no  uniform  correspondence  of  this 
nature;  in  fact,  in  those  cities  which  are  industrially  more  specialized, 
practically  no  uniformity  whatever  will  be  observed,  the  percentages  un- 
employed in  any  such  specialized  city  rising  and  falling  usually  with  the 
rise  and  fall  of  the  percentages  of  unemployment  in  the  major  industry 
of  that  city.  In  Table  III  are  presented  data  on  which  these  conclusions 
are  based. 


282 


SOCIAL  INSURANCE. 


[Feb. 


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1917.1 


HOUSE  —  No.  1850. 


283 


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Membership  reporting  was  not  sufficiently  large  to  justify  use  of  returns  for  comparative  purposes. 
Owing  to  the  fact  that  the  respective  dates  —  December  31,  1911,  March  31,  1912,  and  June  30,  1912  —  fell  on  Sunday,  the  date  chosen  for  the  returns  in  each  case  was 
day  preceding. 
The  unemployment  of  the  textile  operatives  during  the  memorable  strike  that  occurred  in  Lawrence  early  in  1912  is  not  represented  in  this  percentage  for  the  reason 
prior  to  March  30,  1912,  nearly,  if  not  quite,  all  the  strikers  had  returned  to  work. 
In  explanation  of  this  unusually  high  percentage  unemployed  for  all  causes  it  should  be  stated  that  over  9,000  organized  textile  workers  in  Lowell  who  were  involved 
strike  pending  on  March  30  were  included  in  the  aggregate  number  reported  as  unemployed  on  that  date. 
This  high  percentage  was  due  principally  to  unemployment  of  a  large  number  of  street  and  electric  railway  employees  who  were  involved  in  a  strike  With  these 
iers  eliminated  the  percentage  would  have  been  13.9. 
This  high  percentage  was  due  principally  to  unemployment  of  a  large  number  of  machinists  who  were  involved  in  a  strike.  With  these  strikers  eliminated  the  uer- 
age  would  have  been  only  6.5  at  the  close  of  September,  and  7.1  at  the  close  of  December. 
This  high  percentage  was  due  principally  to  the  unemployment  of  a  large  number  of  granite  cutters  who  were  involved  in  a  strike.  With  tliese  eliminated  the  per- 

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284 


SOCIAL  INSURANCE. 


[Feb. 


D.    UNEMPLOYMENT  IN  VARIOUS  INDUSTRIES. 

The  percentages  unemployed  in  the  several  industries  do  not  correspond 
closely  with  the  percentages  for  all  industries,  except  in  the  case  of  the 
building  trades,  which  include  each  quarter  a  fairly  large  proportion  of 
the  aggregate  membership  represented  by  the  returns;  and  for  all  of  the 
principal  industries  there  may  be  noted  a  wide  range  of  unemployment. 

In  the  following  table  are  shown,  for  the  period  under  consideration, 
the  percentages  unemployed  in  the  six  leading  industries  at  the  close  of 
the  respective  quarters. 


TABLE  IV.  —  Percentage  of  Membership  Unemployed  (All  Causes)  at  the 
Close  of  Each  Quarter,  1908-1916:   By  Principal  Industries. 


QUARTERS  ENDING  — 

All  In- 
dustries. 

Building 
Trades. 

Boot  and 
Shoe 
Manufac- 
turing. 

Textiles. 

Trans- 
portation 
(Steam 
and 
Electric). 

Iron  and 
Steel 
Manufac- 
turing. 

Printing 
and 
Allied 
Trades. 

March  31,  1908,  . 

17.9 

25.2 

8.0 

43.9 

13.3 

16.6 

9.0 

June  30,  1908,      . 

14.4 

18.3 

18.2 

13.6 

8.9 

17.8 

10.5 

September  30,  1908,    . 

10.6 

9.3 

17.1 

15.5 

4.8 

16.0 

12.6 

December  31,  1908,     . 

13.9 

21.2 

6.4 

20.9 

5.7 

16.3 

9.4 

March  31,  1909,  . 

11.4 

18.5 

12.8 

6.7 

4.3 

9.8 

6.4 

June  30,  1909,      . 

6.4 

5.0 

8.0 

6.9 

3.7 

7.6 

5.6 

September  30,  1909,    . 

4.8 

3.1 

7.1 

5.1 

2.9 

3.5 

4.4 

December  31,  1909,     . 

9.4 

17.8 

3.3 

12.6 

2.2 

10.9 

3.6 

March  31,  1910,  . 

7.1 

8.9 

7.4 

8.7 

5.2 

4.2 

3.6 

June  30,  1910,      . 

7.0 

4.2 

9.6 

17.9 

4.9 

3.9 

3.8 

September  30,  1910,    . 

5.6 

4.5 

7.9 

7.5 

3.1 

5.0 

3.7 

December  31,  1910,     . 

10.2 

18.0 

5.0 

8.6 

4.0 

14.3 

4.0 

March  31,  1911,  . 

10.4 

19.3 

12.0 

9.7 

4.1 

6.3 

4.6 

June  30,  1911,      . 

6.6 

6.4 

4.4 

21.3 

2.8 

13.4 

4.5 

September  30,  1911,    . 

5.6 

5.0 

4.5 

11.9 

2.4 

7.5 

6.6 

December  30,  l  1911,  . 

9.7 

20.9 

2.3 

7.5 

3.0 

12.6 

6.0 

March  30,  l  1912, 

H.I2 

17.0 

13.9 

29.  12 

1.9 

7.8 

5.7 

June  29,  !  1912,    . 

5.3 

2.7 

8.3 

2.4 

2.6 

10.7 

5.4 

September  30,  1912,    . 

4.7 

2.5 

9.2 

5.3 

1.9 

10.5 

3.9 

December  31,  1912,     . 

9.1 

14.9 

4.6 

12.9 

3.2 

11.9 

3.7 

March  31,  1913,  . 

11.3 

13.4 

14.9 

14.7 

3.9 

7.4 

2.9 

June  30,  1913,      . 
September  30,  1913,    . 

6.4 
6.8 

7.9 
9.2 

5.5 

6.2 

12.8 
13.0 

2.5 
2.1 

9.2 

8.1 

4.5 

4.2 

December  31,  1913,     . 

10.4 

23.9 

4.0 

5.9 

4.1 

18.2 

5.0 

March  31,  1914,  . 

12.9 

29.7 

14.4 

5.1 

3.6 

11.5 

5.0 

June  30,  1914,      . 

9.9 

12.4 

12.9 

6.4 

3.5 

13.1 

9.8 

September  30,  1914,    . 

11.0 

13.8 

13.3 

11.6 

4.5 

13.8 

7.8 

December  31,  1914,     . 

18.3 

33.8 

14.7 

21.2 

6.8 

18.5 

12.1 

March  31,  1915,   . 

16.6 

26.3 

22.4 

10.1 

8.8 

11.8 

9.8 

June  30,  1915,      . 

10.6 

13.2 

10.9 

6.9 

4.4 

12.2 

10.5 

September  30,  1915,    . 

7.0 

8.5 

5.5 

3.6 

3.2 

16.  23 

5.7 

December  31,  1915,     . 

8.6 

17.6 

2.2 

4.0 

7.0 

12.33 

5.9 

March  31,  1916,  . 

8.6 

22.0 

5.1 

4.3 

3.2 

5.4 

7.9 

June  30,  1916,      . 

4.2 

7.6 

3.4 

3.1 

3.8 

2.1 

3.0 

September  30,  1916,    . 

3.9 

3.7 

4.7 

2.2 

4.2 

1.6 

3.7 

Mean, 

1.4 

13.4 

79 

87 

3.8 

10.5 

54 

Average,    . 

94 

13.9 

89 

11.2 

4.3 

10.5 

6.1 

1  Owing  to  the  fact  that  the  respective  dates  —  December  31,  1911,  March  31,  1912,  and  June  30, 
1912  —  fell  on  Sunday,  the  date  chosen  for  the  returns  in  each  case  was  the  day  preceding. 

2  In  explanation  of  this  unusually  high  percentage  unemployed  for  all  causes  it  should  be 
stated  that  over  9,000  organized  textile  workers  in  Lowell  who  were  involved  in  a  strike  pending 
on  March  30  were  included  in  the  aggregate  number  reported  as  unemployed  on  that  date. 

J  This  high  percentage  was  due  principally  to  the  unemployment  of  a  very  large  number  of 
machinists  in  Worcester  who  were  on  strike.  With  the  strikers  eliminated  the  percentage  for  this 
group  of  trades  would  have  been  only  3.8  for  the  close  of  September,  and  3.3  for  the  close  of 
December,  1915. 


1917.]  HOUSE  —  No.  1850.  285 

In  the  building  trades  the  highest  percentage  reported  unemployed 
during  the  period  was  33.8  on  December  31,  1914.  Other  percentages 
exceeding  20.0  were  29.7  on  March  31,  1914;  26.3  on  March  31,  1915; 
25.2  on  March  31,  1908;  23.9  on  December  31,  1913;  22.0  on  March  31, 
1916;  21.2  on  December  31,  1908;  and  20.9  on  December  30,  1911.  The 
influence  of  the  weather  conditions  is  more  marked  in  the  building  trades 
than  in  any  group  of  trades,  and  it  will  be  observed  that  in  this  group  the 
highest  percentages  unemployed  are  either  for  the  close  of  December  or 
March.  During  periods  of  depression,  it  is  also  true  that  conditions  in 
the  building  trades  are  by  no  means  satisfactory  even  during  the  summer 
and  fall. 

In  boot  and  shoe  manufacturing,  the  highest  percentages  unemployed 
were  22.4  on  March  31,  1915;  18.2  on  June  30,  1908;  and  17.1  on  September 
30,  1908;  but  for  no  other  quarter  during  the  period  did  the  percentage 
unemployed  in  this  industry  exceed  14.9  (March  31,  1913).  Usually  it 
will  be  observed  that  there  is  a  slack  period  in  the  spring  and  another  in 
the  fall  of  the  year,  representing  what  is  commonly  known  in  the  trade  as 
"  between  seasons." 

In  the  textile  industry,  the  highest  percentage  unemployed  during  the 
period  was  43.9  on  March  30,  1908;  other  high  percentages  were  reported 
as  follows:  29.1  on  March  30,  1912;  21.3  on  June  30,  1911;  21.2  on  Decem- 
ber 31,  1914;  and  20.9  on  December  31,  1908.  In  this  industry  the  effects 
of  the  industrial  depression  in  1907  and  1908  were  very  keenly  felt,  and, 
although  there  was  some  recovery  during  the  second  and  third  quarters 
of  the  year  1908,  the  high  percentage,  20.9,  at  the  close  of  December,  1908, 
indicated  that  the  recovery  was  by  no  means  complete  even  at  that  time. 
The  very  high  percentage  (29.1)  on  March  30,  1912,  was  due  to  the  un- 
employment of  a  large  number  of  textile  workers  who  were  involved  in 
strikes  on  that  date.  In  this  connection,  it  should  be  pointed  out  that, 
owing  to  the  comparatively  small  percentage  organized  of  the  aggregate 
number  of  textile  workers  in  Massachusetts,  the  returns  for  this  industry 
are,  admittedly,  very  meagre.  Organizations^which  report,  however,  are 
composed  principally  of  the  more  skilled  workmen  in  this  industry  on  the 
progress  of  whose  work  depend  those  processes  on  which  unskilled  labor 
is  principally  employed.  The  facts,  therefore,  may  be  taken  as  represent- 
ative of  general  conditions  in  the  industry  from  time  to  time,  but  no 
claim  is  made  that  they  constitute  an  absolute  index  of  the  amount  of 
unemployment  throughout  the  entire  industry  at  any  one  time. 

For  transportation,  in  which  group  are  included  steam  and  electric 
railway  service,  the  only  high  percentages  unemployed  were  13.3  on 
March  31,  1908;  8.9  on  June  30,  1908;  and  8.8  on  March  31,  1915.  Ordi- 
narily railroad  employees  are  rather  continuously  employed,  and  the 
percentages  unemployed  are,  therefore,  usually  low  and  fairly  constant. 
Furthermore,  it  is  a  practice  of  the  railway  companies  to  place  their  em- 
ployees on  " short  time"  rather  than  to  reduce  the  force  whenever  condi- 
tions are  such  as  to  necessitate  a  curtailing  of  expenses  during  periods  of 


286  SOCIAL  INSURANCE.  [Feb. 

depression.  For  this  reason  the  comparative  percentages  do  not  indicate 
fully  the  measure  of  unemployment  in  this  industry  during  such  periods. 

In  the  iron  and  steel  manufacturing  industries,  the  percentages  unem- 
ployed were  high  during  the  entire  year  1908,  and  again  during  the  de- 
pression of  1914-1915.  On  the  other  hand,  since  the  outbreak  of  the 
European  war  in  1934,  the  great  demand  for  munition  workers  has  resulted 
in  reducing  the  percentages  unemployed  almost  to  a  minimum,  and, 
except  for  a  certain  amount  of  unemployment  due  to  strikes,  the  effects 
of  which  at  the  close  of  the  third  and  fourth  quarters  in  1915  were  reflected 
in  fairly  high  percentages  unemployed  in  this  industry,  highly  satisfactory 
conditions  have  maintained. 

In  the  printing  and  allied  trades,  high  percentages  were  reported  as 
unemployed  at  the  close  of  each  quarter  :n  1908,  and  again  during  the 
depression  in  1914-1915,  but  an  examination  of  the  unemployment  per- 
centages for  the  period  1909  to  the  close  of  1914  shows  a  comparatively 
uniform  percentage  unemployed  at  the  close  of  each  of  the  respective 
quarters. 

E.    UNEMPLOYMENT  IN  THE  VARIOUS  OCCUPATIONS. 

An  examination  of  the  statistics  of  unemployment  in  the  various  oc- 
cupations discloses  a  very  wide  range  in  the  percentages  unemployed. 
In  the  same  occupation  there  may  be  at  one  time  practically  no  unem- 
ployment among  the  members  of  the  organizations  reporting,  while  at 
another  time  the  percentage  may  reach  a  high  figure.  A  comparison  of 
the  percentages  for  one  occupation  with  those  of  another  may  also  disclose 
a  wide  variation  in  the  amount  of  unemployment  in  the  occupations 
compared.  Again,  in  certain  occupations  the  percentages  unemployed 
may  continue  fairly  constant  for  a  long  period,  then  abruptly  rise  to  a 
high  point.  For  the  occupations  in  the  building  trades  (carpenters, 
bricklayers,  painters,  etc.)  much  seasonal  unemployment  is  usually  re- 
ported at  the  close  of  March  and  December  in  each  year. 

While  the  percentages  of  unemployment  by  occupations  may  prove  of 
comparative  value  in  certain  instances,  they  should  be  used  with  caution, 
particularly  where  comparisons  are  made  between  percentages  in  those 
occupations  for  which,  owing  to  the  small  number  of  employees  reporting, 
the  returns  may  not  have  been  properly  representative.  On  the  whole, 
comparisons  based  on  percentages  unemployed  in%the  several  more  im- 
portant industries  are  to  be  recommended  in  preference  to  comparisons 
on  an  occupational  basis. 

Percentages  in  detail  by  occupations  for  the  period  1908-1916  are  pre- 
sented in  Table  V  below. 


1917.] 


HOUSE  —  No.  1850. 


287 


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288 


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[Feb. 


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1917,] 


HOUSE  —  No.  1850. 


289 


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290  SOCIAL  INSURANCE.  [Feb. 


E.     DISCUSSION  OF  CHARTS. 

For  a  long  period  of  years  the  principal  European  countries  have  col- 
lected and  published  statistics  relative  to  unemployment.  Owing  to  the 
varying  methods  of  collecting  these  statistics,  and  the  differing  sources 
from  which  they  are  obtained,  the  absolute  figures  for  the  several  countries 
are  not  directly  comparable  with  the  similar  data  obtained  in  Massachu- 
setts and  New  York  State,  but  they  may  be  used  in  plotting  curves  show- 
ing the  fluctuations  in  unemployment  in  the  several  countries  during  a 
period  of  years.  For  purposes  of  making  such  comparison,  the  Bureau 
of  Statistics  has  prepared  the  chart  appearing  on  the  following  page, 
showing  graphically  the  extent  to  which  the  periods  of  industrial  prosperity 
and  depression  in  Massachusetts  and  New  York  State  correspond  with 
those  in  the  United  Kingdom  and  Germany.  An  examination  of  the 
chart  shows  a  remarkable  correspondence  in  the  fluctuations  of  the  sev- 
eral curves,  but  it  will  be  observed  that  the  fluctuations  in  the  curves 
representing  the  returns  for  Germany  and  the  United  Kingdom  are  by 
no  means  as  violent  as  the  corresponding  fluctuations  in  the  curves  rep- 
resenting the  conditions  in  Massachusetts.  This,  no  doubt,  may  be  ex- 
plained by  the  fact  that  the  British  and  German  returns  refer  to  far  larger 
numbers  of  employees  than  do  the  returns  for  Massachusetts,  and,  con- 
sequently, a  large  variation  in  the  number  unemployed  in  a  few  industries 
does  not  affect  the  general  percentages  in  the  one  case  as  noticeably  as  in 
the  other. 

The  percentages  used  in  plotting  the  Massachusetts  curves,  of  which 
there  are  two,  —  the  one  representing  unemployment  for  all  causes  (the 
heavy  unbroken  line)  and  the  other  representing  the  percentages  unem- 
ployed because  of  lack  of  wrork  (the  heavy  line  of  dashes)  —  have  already 
been  discussed  in  some  detail,  but  certain  significant  facts  are  brought 
out  by  the  fluctuations  in  these  curves.  Thus  the  curve  representing  un- 
employment for  all  causes  shows,  in  general,  a  downward  inclination  from 
the  high  point  in  1908  following  the  period  of  industrial  depression  until 
the  end  of  the  third  quarter  in  1911,  interrupted,  however,  by  upward 
fluctuations  during  the  winter  period  of  each  year.  In  the  Spring  of  1912 
it  rose  rapidly  upward,  this  being  due  to  the  effect  of  the  strikes  of  very 
large  numbers  of  textile  workers,  including  those  which  occurred  at  that 
time  at  Lawrence  and  Lowell.  By  the  close  of  September,  1912,  conditions 
had  become  much  more  normal,  but  after  the  close  of  1912  the  curve 
showed,  in  general,  an  upward  trend  until,  at  the  close  of  December,  1914, 
it  reached  the  highest  point  recorded  during  the  entire  period.  In  1915, 
there  began  again  a  period  of  prosperity  which  is  indicated  by  the  down- 
ward trend  of  the  curve  during  that  year.  The  facts  for  the  first  three 
quarters  in  1916  are  not  represented  on  the  charts,  but  in  this  connection 
it  may  be  stated  that  at  no  time  during  the  entire  period  1908  to  1915 
have  the  percentages  for  the  State  as  a  whole  been  as  low  as  during  the 
year  1916.  The  curve  representing  unemployment  for  lack  of  work  fol- 


1917.1 


HOUSE  —  No.  1850. 


291 


lows  closely  the  trend  of  the  curve  for  all  causes  already  described,  and  at 
u  fairly  constant  distance  below  the  former  curve.    A  marked  exception 


to  this  rule  is  found  at  a  high  point  reached  at  the  close  of  March,  1912, 
by  the  curve  for  all  causes,  due  to  the  unemployment  directly  and  in- 
directly resulting  from  the  series  of  textile  strikes  to  which  reference  has 
been  made. 


292  SOCIAL  INSURANCE.  [Feb. 

While  no  comparison  of  the  general  level  of  the  several  curves  can  be 
safely  made,  owing  to  the  varying  nature  of  the  returns  on  which  they 
have  been  based,  it  may  be  proper  to  add  that  the  generally  high  level  of 
the  two  curves  for  New  York  State  has  been  attributed  to  the  relatively 
large  representation  in  the  returns  for  that  State  of  certain  trades  in  which 
usually  there  is  apt  to  be  considerable  unemployment,  as,  for  example, 
in  the  garment  trades  in  New  York  City.  ' 

For  purposes  of  showing  the  fluctuations  in  unemployment  in  the  prin- 
cipal industries  of  the  State,  the  chart  appearing  on  the  following  page 
has  been  prepared.  In  general,  the  curves  for  the  six  principal  industries 
follow  the  trend  of  the  curve  representing  the  fluctuations  of  unemploy- 
ment in  all  industries.  For  convenience  in  making  the  comparison,  the 
curve  representing  unemployment  in  all  industries  for  all  causes  has  been 
again  reproduced  on  the  second  chart,  and  it  appears  at  the  bottom  of 
the  chart. 

Attention  may  be  called  to  the  more  significant  facts  brought  out  by 
the  fluctuations  in  the  curves  for  the  respective  industries.  Thus  in  the 
case  of  the  building  trades,  one  will  observe  the  effect  of  seasonal  inactivity 
due  to  unemployment  during  the  winter  months.  In  boot  and  shoe  manu- 
facturing, "between  seasons"  periods  are  represented  by  high  points 
occurring  quite  uniformly  in  the  spring  of  the  year.  In  textile  manufac- 
turing no  special  uniformity  in  fluctuations  will  be  observed.  The  high 
point  in  the  spring  of  1912  represents  for  this  industry  the  unemployment 
due  to  strikes  in  the  principal  textile  centers  to  which  reference  has  already 
been  made.  The  curve  representing  unemployment  in  transportation,  with 
the  exception  of  fluctuations  upward  at  times  of  depression,  shows  uni- 
formly a  low  percentage  unemployed. 

In  iron  and  steel  manufacturing,  marked  fluctuations  may  be  noted,  and 
the  effect  of  industrial  depression  likewise  is  to  be  observed.  In  the  print- 
ing and  allied  trades,  as  is  true  of  transportation,  no  marked  fluctuations 
are  to  be  observed,  except  those  which  are  due  to  periods  of  industrial 
depression. 

By  way  of  general  summary,  it  may  be  stated  that  the  transportation 
industry,  and  the  printing  and  allied  trades  show  usually  less  unemploy- 
ment than  any  of  the  other  trades,  and  even  in  times  of  depression,  the 
proportion  of  wage-earners  thrown  out  of  work  as  represented  by  the 
percentages  and  by  the  upward  fluctuations  in  the  curves,  is  by  no  means 
as  large  as  in  the  case  of  the  other  industries.  These  facts  throw  some 
light  upon  the  question  as  to  which  industry  should  be  the  first  to  receive 
consideration,  were  the  State  to  establish  any  system  of  unemployment 
insurance,  or  to  provide  for  the  regularization  of  industry,  and,  if  the 
returns  made  by  labor  organizations  are  to  be  taken  as  representative  of 
conditions  generally  throughout  the  Commonwealth,  the  industries  which 
should  receive  first  consideration,  in  the  order  of  their  relative  importance 
from  the  standpoint  of  the  unemployment  problem,  would  appear  to  be 


1917.1 


HOUSE  —  No.  1850. 


293 


CHART  II.  —  Percentages  of  Trade  Union  Members  Unemployed  in  Massa- 
chusetts, 1908-1915:  By  Principal  Industries. 


1908  1909    191 


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294 


SOCIAL  INSURANCE. 


[Feb. 


CHART  III.  —  Relation  between  Unemployment  and  Crimes  against  Property. 

NOTE.  —  In  the  chart  below,  the  curve  with  reference  to  sentences  for  crimes  against  property 
has  been  superimposed  upon  the  curve  representing  the  fluctuations  in  unemployment  daring 
the  period  1908-1915.  It  will  be  observed  that  the  fluctuations  in  each  of  the  two  curves  corres- 
pond in  a  measure,  indicating  that  there  is  some  relationship  between  criminality  and  unem- 
ployment. It  is  a  matter  of  general  knowledge  that  during  times  of  depression  the  number  of 
arrests  on  account  of  vagrancy  and  minor  thefts  is  much  greater  than  during  times  of  prosperity. 
The  sentences  for  these  causes  (vagrancy  and  minor  thefts)  are  included  in  the  classification 
"Sentences  for  crimes  against  property,"  but  the  data  with  reference  to  such  crimes  are  not 
classified  in  such  detail  as  so  permit  of  a  segregation  of  the  sentences  for  vagrancy  and  minor 
thefts.  In  making  the  comparison,  therefore,  between  the  two  curves,  it  should  be  borne  in  mind 
that  the  correspondence  in  fluctuations  is  merely  indicative,  not  conclusive,  evidence  as  to  the 
relationship  between  crime  and  unemployment. 


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1917.]  HOUSE  — No   1850.  295 


MEMORANDUM  FOR  THE  SUBCOMMITTEE  ON  UNEMPLOY- 
MENT OF  THE  COMMISSION  ON  SOCIAL  INSURANCE. 

Confirming  my  views  as  expressed  to  the  committee  some  time  since 
bearing  upon  the  means  and  opportunities  for  increased  usefulness  of  the 
Public  "Employment  Offices,  I  beg  to  say  that  if  the  legislature  should  feel 
that  the  private  offices  ought  to  be  brought  at  this  time  under  some  form 
of  central  state  supervision  and  licensing,  such  a  function  ought  not  to 
be  placed  upon  the  Bureau  of  Statistics,  as  it  is  more  nearly  analogous 
to  the  work  of  the  State  Board  of  Labor  and  Industries;  arid  if  it  should 
be  decided  to  add  to  the  State's  functions  in  this  respect,  it  will  probably 
be  considered  logical  to  transfer  jurisdiction  over  the  State  Employment 
Offices  to  the  board  charged  with  the  duty  of  supervising  the  private 
agencies.  To  such  a  transfer,  under  the  circumstances,  I  could  offer  no 
objection.  On  the  merits  of  the  question  as  to  whether  the  State  ought 
or  ought  not  to  assume  jurisdiction  over  the  private  agencies,  this  ap- 
pears to  be  wholly  a  matter  of  public  policy  to  be  determined  by  the 
Legislature  and  with  respect  to  which  I  have  not  felt  it  within  my  official 
province  to  express  an  opinion. 

Regardless,  however,  of  whether  the  State  is  to  assume  any  supervisory 
jurisdiction  over  the  private  employment  pffices  and  regardless,  also,  of 
the  question  as  to  whether  the  state  offices  should  be  transferred  to  some 
other  jurisdiction  or  remain  under  the  control  of  the  Director  of  the 
Bureau  of  Statistics,  I  feel  very  strongly  that  the  time  has  come  when 
something  must  be  done  to  increase  the  efficiency  and  opportunities  for 
usefulness  of  the  state  offices  to  the  public.  If,  therefore,  it  should  not 
be  deemed  desirable  for  any  reason,  either  ultimately  or  at  the  present 
time,  to  transfer  the  state  offices  to  some  other  department,  and  the  re- 
sponsibility for  their  management  and  development  is  to  remain  with  the 
Director  of  the  Bureau  of  Statistics,  he  should  be  given  a  certain  amount 
of  increased  authority  and  opportunity  tojievelop  them  along  lines  of 
increased  usefulness  to  the  community,  and  the  means,  through  increased 
appropriations  and  other  legislation  as  may  be  necessary  to  enable  him 
to  accomplish  this  result.  No  very  radical  changes  in  the  existing  statute 
providing  for  the  establishment  and  maintenance  of  the  state  offices  would 
be  necessary  for  this  purpose;  provision,  however,  should  be  made  sub- 
stantially for  the  following :  — 

1.  Authority  to  appoint  a  competent  person  who  can  devote  his  entire 
time  to  supervising  the  state  offices,  keeping  in  touch  with  the  public,  and 
studying,  and  accumulating  data  concerning  the  whole  employment  prob- 
lem. It  may  be  that  the  Director  of  the  Bureau  has  authority  under  the 
general  terms  of  the  present  law  to  make  such  an  appointment,  but  the 
amount  necessary  to  pay  the  additional  salary  would  presumably  be  more 
readily  appropriated  if  the  authority  to  create  such  a  position  be  specifically 
provided  for  in  the  statute. 


296  SOCIAL  INSURANCE.  [Feb. 

2.  Authority  to  appoint  a  general  advisory  council  to  advise  with  respect 
to  the  management  of  the  offices  in  general,  and  separate  advisory  com- 
mittees for  the  office  in  each  city,  it  being  the  intention  that  the  mem- 
bership of  such  bodies  be  composed  of  representatives  of  employers  and 
employees,  the  public  school  system,  and  perhaps  other  particular  interests 
in  the  community. 

3.  Authority  specifically  provided  for  by  law  to  develop  co-operation 
with  the  school  authorities  in  order  that  there  may  be  unity  of  effort 
between  the  latter  and  the  employment  offices  in  the  placement  of  juve- 
niles in  suitable  employment,  until  such  time  as  this  function  is  entrusted 
by  statute  entirely  to  the  school  officers. 

4.  Broader  opportunity  to  procure  a  higher  grade  of  expert  service  than 
seems  feasible  under  the  operation  of  the  Civil  Service  regulations,  by 
providing  for  a  modification  of  the  same  in  certain  cases  with  the  approval 
of  the  Governor  and  Council. 

I  am  enclosing  herewith  the  draft  of  a  bill  intended  to  accomplish  these 
purposes.  If  it  should  meet  with  the  approval  of  your  commission  and 
you  could  see  your  way  clear  to  recommend  a  measure  along  these  lines, 
I  am  sure  it  would  be  a  very  helpful  contribution  to  the  result  I  think  we 
would  all  like  to  see  accomplished,  namely,  an  increase  in  the  capacity 
for  usefulness  of  the  state  offices  to  the  community. 

As  bearing  upon  the  need  of  better  financial  support  for  the  state  offices 
in  the  interest  of  increased  efficiency,  I  would  like  to  call  your  attention 
to  the  facts  as  respects  appropriations  for  their  maintenance.  My  esti- 
mate a  year  ago,  based  upon  a  conservative  appraisal  of  the  needs  of  the 
four  offices  for  the  year  1916,  and  without  contemplating  any  compre- 
hensive plan  of  expansion,  was  $36,905.  This  the  Legislature  reduced  to 
$36,000.  By  rigorously  confining  expenditures  to  the  absolute  necessities 
of  routine  requirements,  the  year  closed  with  an  unexpended  balance  of 
$12.48.  In  my  budget  for  1917,  I  asked  for  a  total  of  $40,325,  or  $4,325 
more  than  was  appropriated  in  1916.  This  has  l?een  reduced  by  $3,825 
in  the  appropriation  bill  which  has  now  passed  the  Legislature  and  while 
it  leaves  the  amount  appropriated  $500  above  last  year's  appropriation, 
the  latter  was  inadequate  and  I  shall  be  able  to  conduct  the  offices  at 
Boston,  Springfield,  and  Worcester  —  after  closing  the  Fall  River  office, 
which  I  am  now  planning  to  do  —  upon  the  amount  provided,  $36,500, 
only  by  the  most  rigid  economies,  which  can  be  exercised,  I  fear,  only  at 
the  expense  of  efficient  service. 

CHARLES  F.  GETTEMY, 
Director,  Bureau  of  Statistics. 

FEBRUARY,  6,  1917. 


1917.1  HOUSE  —  No.  1850.  297 


MEMORANDUM  IN  RE  UNEMPLOYMENT  RELIEF. 

INTRODUCTORY. 

Unemployment  is  a  by-product  of  industrial  mismanagement  and  is 
most  prevalent  during  and  immediately  following  an  industrial  depression. 
Makeshift  relief  measures  such  as  the  establishment  of  soup  kitchens,  the 
use  of  public  buildings  and  churches  as  lodging  houses,  the  creation  of 
bread  lines  and  other  hastily  ctevised  methods  of  caring  for  the  unem- 
ployed, are  merely  palliative,  pauperizing  those  aided  without  affording 
any  remedy  for  the  fundamental  defects  in  the  industrial  organization 
of  society.  Nor  will  the  multiplication  of  employment  agencies,  either 
public  or  private,  make  possible  the  furnishing  of  "jobs"  to  all  who  apply, 
especially  during  a  period  of  industrial  depression,  when  there  are  insuf- 
ficient jobs  to  be  had. 

THE  FURNISHING  OF  WORK  FOR  THE  UNEMPLOYED.' 
In  addition  to  providing  the  means  whereby  the  worker  can  be  directed 
to  employment  when  it  is  available,  the  State  should  guarantee  to  all  who 
honestly  seek  employment  an  opportunity  of  earning  a  livelihood.  To  the 
extent  that  private  enterprise  fails  to  provide  continuous  employment, 
the  State  should  make  provision  for  the  conservation  of  the  surplus  of 
labor  by  furnishing  employment  to  the  worthy  unemployed,  yet  on  terms 
such  as  would  not  attract  labor  from  private  industry. 

PROCEDURE. 

So  far  as  possible,  industries  of  a  non-competitive  character  should  be 
selected  as  the  field  in  which  "relief  works"  are  to  be  established  during 
periods  of  industrial  depression.  During  periods  of  normal  prosperity, 
it  would  be  necessary  merely  to  maintain  the  administrative  machinery 
for  the  management  of  such  relief  works,  so  that  they  could  be  put  into 
operation  immediately  when  it  shall  have  been  determined  that  there  is 
any  considerable  amount  of  unemployment  prevailing.  Already  a  notable 
precedent  has  been  established  in  this  State  in  the  matter  of  furnishing 
work  to  the  unemployed.  In  1915  nearly  $100,000  was  appropriated  by 
the  State  to  be  used  for  this  purpose,  and  an  additional  amount  of  over 
$14,000  was  contributed  to  the  fund  by  private  individuals.  This  fund 
was  expended  for  moth  suppression,  forest  fire  prevention,  forest  thinning, 
and  other  branches  of  foresters'  work.  Thus  a  direct  return  to  the  State 
resulted  coincidently  with  the  relief  of  the  able-bodied  unemployed  who 
engaged  in  this  work.  But  at  any  time  during  a  depression  such  as  that 
in  1915,  there  are  many  people  who  are  physically  unable  to  engage  in 
work  of  this  character,  and  obviously  some  provision  should  be  made 
for  the  employment  of  men  who  are  not  fitted  for  out-door  work  and  for 
women  who  form  an  increasingly  large  percentage  of  our  industrial  pop- 
ulation. The  relief  works,  therefore,  should  be  sufficiently  varied  to  meet 
more  adequately  the  needs  of  all  classes  of  the  unemployed  and  particu- 


298  SOCIAL  INSURANCE.  [Feb. 

larly  the  need  of  those  who  are  handicapped  —  the  first  persons  to  be 
thrown  out  of  work. 

Hence  appears  the  need  of  a  permanent  administrative  body  which  shall 
determine  the  industries  in  which  relief  works  should  be  established  and 
which  body  should  be  prepared  to  operate  such  works.  This  function 
should  be  delegated  to  that  department  of  the  Commonwealth  which 
may  eventually  have  charge  of  the  administration  of  the  State  Public  Em- 
ployment Offices  and  to  which  body  the^supervision  of  private  employ- 
ment offices  should  also  be  delegated.  It  is  obvious  that  the  administrator 
of  the  employment  offices  of  the  State  would  have  an  immediate  knowledge 
of  the  actual  conditions  in  the  various  industries,  the  industries  in  which 
unemployment  is  most  prevalent,  and  at  the  same  time  be  in  a  position 
to  co-ordinate  these  several  functions  in  such  manner  as  best  to  insure 
the  carrying  out  of  a  comprehensive,  unified  plan  for  the  relief  of  the  un- 
employed. Because  of  the  importance  of  the  administrative  work  which 
would  be  entailed,  and  also  because  of  the  fact  that  the  character  of  the 
work  would  not  be  closely  related  to  that  of  any  other  of  the  adminis- 
trative departments  of  the  Commonwealth,  it  is  suggested  that  a  State 
" Board  of  Employment"  be  established  which  would  administer  the 
present  Public  Employment  Offices  and  such  others  as  may  be  estab- 
lished rather  than  that  these  added  functions  should  be  delegated  to  any 
existing  department. 

COST  OF  ADMINISTRATION. 

The  administration  of  the  Public  Employment  Offices  might,  as  hereto- 
fore, be  provided  for  by  direct  State  appropriation,  but  the  cost  of  that 
branch  of  work  which  relates  to  the  relief  of  the  unemployed  might  well 
be  met  by  setting  aside  during  years  of  prosperity  an  unemployment 
reserve  fund  to  be  used  during  periods  of  depression.  Furthermore,  con- 
siderable additions  to  the  fund  for  the  relief  of  the  unemployed  might  be 
secured  in  the  nature  of  private  contributions,  as  in  1915,  when  it  was 
provided  that  contributions  might  be  accepted  as  additions  to  the  fund 
for  the  relief  of  the  unemployed.  Possibly  also,  large  bequests  might  be 
made  to  swell  the  fund.  Nor  is  it  by  any  means  a  foregone  conclusion 
that  the  relief  works,  such  as  the  reclamation  of  lands,  reforestation,  etc., 
if  properly  conducted,  would  not  eventually  afford  to  the  Commonwealth 
a  fair  return  upon  the  investment,  whereas  the  granting  of  unemployment 
insurance  would  be  a  constant  charge  upon  the  Commonwealth  to  the 
extent  that  subsidization  by  the  State  might  be  required. 

Respectfully  submitted, 
OCTOBER  3,  1916.  ROSWELL    F.   PHELPS. 

NOTE.  —  This  memorandum  has  been  submitted  as  a  statement  of  my 
personal  views,  and  should  not  be  considered  as,  in  any  measure,  reflecting 
the  policy  of  the  Massachusetts  Bureau  of  Statistics  with  which  I  am 
officially  connected. 


1917.]  HOUSE  — No.  1850.  299 


AN  ABSTRACT  OF  THE  STATEMENT  OF  H.  J.  SKFFFINGTON, 
RELATIVE  TO  THE  UNITED  STATES  EMPLOYMENT  SERV- 
ICE. 

.  The  Employment  Service,  now  an  established  agency  of  the  Department 
of  Labor,  is  engaged  in  promoting  a  beneficial  distribution  of  wage -earning 
labor  throughout  the  United  States  by  advancing  opportunities  for  profit- 
able emploj'ment. 

This  Service  was  established  in  1907  and  has  been  extended  so  that  at 
present  there  are  offices  in  all  the  large  cities  of  the  country  with  activities 
in  every  state;  the  country  being  divided  into  twenty  zones,  each  zone 
having  a  central  office.  One  of  the  primary  objects  of  the  Service  is  to 
balance  the  nation's  workers,  to  distribute  them  and  thus  in  a  measure 
tend  to  prevent  the  local  derangements  in  the  labor  market,  for  experience 
has  shown  that  there  has  often  been  a  scarcity  of  workers  in  some  parts 
of  the  country,  and  more  workers  than  were  needed  in  other  parts. 

Not  until  the  early  summer  of  1914,  about  15  months  after  the  creation 
of  the  Department  of  Labor,  did  the  larger  work  of  this  Service  begin, 
but  the  rapidity  of  its  growth  is  evidenced  by  the  fact  that  at  the  present 
time  there  is  a  chain  of  Federal  labor  exchanges  which  beneficially  serves 
the  employment  needs  of  the  wage-earning  population  of  the  United 
States.  Of  course  employers  also  are  beneficially  served  by  the  same 
processes,  for  the  benefits  of  employment  facilities  are  reciprocal  in  effect. 

These  various  offices  are  also  in  a  measure  a  sort  of  clearing-house  of 
information.  The  officers  become  acquainted  with  the  industrial  situation 
and  do  all  they  can  in  maintaining  normal  business  conditions  within 
the  state  by  means  of  newspaper  articles,  personal  visits  to  employers 
and  addresses  before  organizations  of  manufacturers,  farmers  and  other 
vocational  societies. 

In  furtherance  of  the  work  the  Department  has  the  co-operation  of  the 
Postoffice  and  Agricultural  Departments  as  well  as  the  Department  of  the 
Interior  and  the  Department  of  Commerce.  It  has  been  greatly  assisted 
by  the  peculiar  advantages  which  the  postal  authorities  have  been  able 
to  provide,  as  some  60,000  postoffices  were  early  brought  into  co-operative 
relations  with  the  Employment  Service. 

Either  an  employer  or  workman  may  obtain  at  any  postoffice  in  the 
United  States  a  blank  application  supplied  by  the  Department,  which 
after  filling  out  and  signing,  may  be  deposited  in  the  mails  anywhere  free 
of  postage.  In  some  cases  the  postmasters  can  bring  the  parties  together 
without  forwarding  their  applications,  but  otherwise  all  applications  are 
transmitted  to  the  nearest  station  or  sub-station  of  the  Labor  Depart- 
ment. There  they  are  compared  for  the  purpose  of  noting  reciprocal 
requirements  and  bringing  the  work-seeker  and  manufacturer  together. 
This  is  done  as  completely  as  possible  at  each  station  and  sub-station. 
Applications  which  remain  unmatched  are  transmitted  to  the  Division  of 


300  SOCIAL  INSURANCE.  [Feb. 

Information  at  Washington,  and  such  of  them  as  then  remain  unmatched 
are  bulletined  to  all  stations  and  sub-stations  with  a  view  to  their  being 
matched  at  one  or  another  of  them. 

Large  employers  of  labor  desirous  of  obtaining  laborers,  mechanics, 
clerks  or  bookkeepers  thus  have  a  direct  means  of  getting  the  men  they 
require.  They  can  write  to  Washington  or  to  their  postmaster  or  can 
speak  to  their  postman  and  rural  carriers.  Blanks  will  be  sent  them  at 
once  to  be  filled  out  by  themselves  and  thus  the  machinery  of  the  Gov- 
ernment is  immediately  put  in  operation  for  their  benefit.  Men  out  of 
employment  follow  the  same  method.  They  state  what  they  want  and 
an  endeavor  is  made  to  place  them  in  employment,  preferably  in  the  com- 
munities where  they  live.  The  service  performed  is  absolutely  free  to 
employees  and  employers  alike. 

The  co-operation  of  the  Department  of  Agriculture  is  important,  for 
three  or  four  Bureaus  in  that  Department  have  extensive  official  commu- 
nication with  agriculturists  in  every  section  and  representatives  in  nearly 
ever^  county  in  the  United  States.  The  total  number  of  its  officers  and 
representatives  in  the  field  serving  in  various  capacities  is  something  like 
170,000,  and  their  services  can  be  secured  not  only  to  enlist  farmers  in 
the  movement,  but  to  carry  on  investigations  of  special  cases,  obtaining 
information  regarding  farmers  who  apply  for  farm  help,  and  in  many  other 
ways  serve  in  an  advisory  capacity  in  their  respective  districts. 

The  importance  of  co-operation  between  the  Federal  Government  and 
all  the  states  and  cities  of  the  United  States  was  recognized  at  an  early 
stage  in  the  development  of  the  U.  S.  Employment  Service,  its  policy 
being  to  co-operate  with  all  states  and  municipal  establishments  organ- 
ized in  whole  or  in  part  for  the  welfare  of  wage-earners,  including  official 
employment  bureaus,  in  carrying  out  plans  for  a  beneficial  distribution 
of  wage  earning  laborers. 

In  order  to  secure  the  confidence  and  co-operation  of  public  employ- 
ment agencies  in  states  and  cities,  the  Department  called  its  first  national 
conference  of  federal,  state  and  municipal  officials  engaged  in  labor  dis- 
tribution. The  formal  call  was  made  April  26,  1915,  by  the  Secretary  of 
Labor.  It  was  addressed  to  all  state  and  municipal  officials  engaged  in 
or  responsible  for  distribution  of  labor  within  their  respective  spheres, 
including  the  Governor  of  each  state.  Pursuant  to  that  call  the  conference 
met  in  San  Francisco  on  August  2,  1915,  and  remained  in  session  the 
greater  part  of  five  days,  and  there  the  plans  of  the  Federal  Government 
on  this  matter  were  set  forth.  It  was  attended  by  official  representatives 
of  public  employment  offices  from  widely  scattered  centers  of  national, 
state  and  city  employment  services.  The  primary  object  of  the  con- 
ference was  to  bring  its  representatives  into  friendly  consultation.  The 
whole  subject  of  co-operation  of  public  employment  agencies  was  frankly 
discussed  and  mutual  understandings  over  points  of  difference  and  possible 
friction  were  arrived  at  in  a  friendly  spirit.  One  of  the  results  of  the  con- 
ference was  the  creation  of  an  advisory  board  consisting  of  12  members, 


1917.]  HOUSE  —  Xo.  1850.  301 

four  chosen  by  the  municipal  delegates,  four  by  the  state  delegates  and 
four  by  the  Secretary  of  Labor.  The  New  England  representative  on 
this  board  is  G.  Harry  Dunderdale  of  the  State  Employment  Bureau  of 
Boston.  This  board  is  regarded  by  the  Department  as  a  constant  com- 
mittee to  give  advice  on  theories  and  methods  of  employment  service, 
which  the  Secretary  of  Labor  has  invited  to  co-operate  with  the  Depart- 
ment of  Labor  in  an  advisory  capacity.  It  lias  no  directive  authority. 

In  accordance  with  its  previously  reported  policy  and  in  the  spirit  of 
the  national  conference  at  San  Francisco,  the  Department  has  effected 
co-operative  arrangements  with  several  state  and  city  public  employ- 
ment agencies,  and  there  has  been  a  steady  growth  in  sentiment  through- 
out the  country  in  favor  of  the  extension  of  the  service.  States  and  mu- 
nicipalities have  organized  existing  systems  on  a  more  effective  basis,  and 
many  of  these  have  joined  in  a  co-operative  system  with  the  Department 
of  Labor  in  furtherance  of  the  work. 

At  New  York  the  proposition  was  favorably  received  by  both  state  and 
city  authorities,  in  consequence  of  which  the  first  experiment  in  Federal- 
State-City  co-operation  began  there.  It  is  still,  however,  in  the  experi- 
mental stage.  Further  stages  of  advancement  have  been  secured  in 
Missouri,  with  headquarters  at  Kansas  City,  while  a  considerable  advance 
has  been  made  in  a  number  of  the  other  larger  states. 

One  of  the  difficulties  likely  to  be  encountered  in  this  co-operative 
work  is  the  embarrassments  incident  to  a  seeming  detail  of  officials  of  one 
independent  branch  of  the  Government  (federal,  state  or  municipal)  to 
service  under  the  orders  of  another  branch.  No  such  subordination  has 
been  intended  or  involved,  and  the  arrangement  in  Pennsylvania  contains 
a  feature  of  special  value  to  overcome  just  such  a  difficulty. ,  There  the}'' 
have  an  Executive  Commission  to  administer  the  whole  co-operative 
service,  and  an  Employment  Committee  under  it  to  carry  on  the  routine 
work.  By  this  arrangement  an  employee  detailed  by  the  Department 
for  the  routine  work  of  co-operative  employment  service  acts  as  a  member 
of  the  Emplo3rment  Committee,  state  and  city  employees  being  the  other 
members.  They,  therefore,  work  together  on  an  equality  basis  instead 
of  appearing  to  work  as  superiors  and  subordinates. 

In  this  development  it  has  not  been  the  purpose  of  the  Bureau,  acting 
in  empk^ment  matters,  to  displace  the  state  and  municipal  efforts  in 
this  field,  but  rather  to  add  and  supplement  their  work  in  this  direction. 
What  the  Bureau  is  desirous  of  obtaining  is  an  active  scheme  of  co-opera- 
tion and  a  uniformity  of  procedure  in  all  the  states  to  the  end  that  dupli- 
cation of  work  may  be  avoided  as  muqh  as  possible.  Of  course  the  states 
and  cities  by  virtue  of  their  closer  affiliation  with  the  people  of  that  locality 
enjoy  benefits  not  within  the  reach  of  the  general  Government,  as  the 
state  and  local  organizations  have  officers  of  local  acquaintance  who 
know  the  wants  and  necessities  of  the  communities  they  represent,  and 
have  an  intimate  knowledge  of  conditions  superior  to  that  of  the  Federal 
agents.  But  there  are  elements  which  the  national  government  possess 


302  SOCIAL  INSURANCE.  [Feb. 

which  neither  the  state  nor  the  municipalities  can  claim,  and  these,  com- 
bined with  the  opportunities  that  the  local  officers  present,  make  an 
ideal  combination  for  the  employment  system. 

To  promulgate  in  any  manner  information  concerning  workmen  wanted 
where  a  strike  exists  or  is  threatened  would  be  inconsistent  with  the  pur- 
pose for  which  the  Department  was  created,  namely,  "to  foster,  promote 
and  develop  the  welfare  of  the  wage-earners  of  the  United  States,  to  im- 
prove their  working  conditions  and  to  advance  their  opportunities  for 
profitable  employment."  Not  only  would  it  not  advance  such  oppor- 
tunities, but  it  would  have  the  reverse  effect.  Such  a  policy  Would  be 
equivalent  to  directing  wage-earners  to  places  already  sufficiently  sup- 
plied with  labor.  Conditions  of  employment  are  in  dispute  and  that  is 
all  which  involves  the  question  of  profitable  employment  —  profitable  to 
wage-earners.  It,  therefore,  follows  that  the  Department  of  Labor  should 
not  make  itself  a  medium  for  conveying  information  of  demands  for  wage- 
earners  where  labor  disputes  are  the  cause  of  the  demands. 

Finding  a  permanent  job  for  a  man  is  not  the  only  wrork  performed  by 
this  Service,  for  its  energies  have  been  directed  toward  supplying  help 
particularly  in  agricultural  industries  during  the  harvest  season,  but  the 
greatest  problem  here  seems  to  be  the  matter  of  transportation.  How 
can  the  people  who  volunteer  for  seasonal  and  other  labor  be  transported? 
The  ordinary  method,  of  course,  is  open,  but  it  is  an  expensive  proposition 
to  travel  long  distances,  and  so  during  the  past  year  efforts  have  been 
made  to  secure  the  legislation  necessary  to  enable  railroads  to  arrange 
with  the  Department  for  reduced  rates.  In  fact  a  bill  has  been  intro- 
duced in  the  Senate  by  Senator  Newlands  which  has  the  approval  of  the 
Department,  which  would  authorize  and  regulate,  special  to  approval 
by  the  Interstate  Commerce  Commission,  special  rates  of  interstate 
transportation  for  persons  directed  to  employment  by  the  Department 
of  Labor. 

Pursuant  to  recommendations  of  the  Commissioner-General,  a  Women's 
and  Girls'  Division  was  organized  in  the  Employment  Service  toward  the 
close  of  the  present  fiscal  year,  and  recommendation  has  been  made  that 
the  Employment  Service  develop  plans  for  the  industrial  needs  of  aged 
people.  This  recommendation  has  for  its  basis  the  fact  that  modern  con- 
ditions condemn  to  the  human  scrap  pile  many  able  bodied  and  active 
brained  men,  and  many  intelligent,  educated  and  competent  women 
whose  only  defect  is  their  having  passed  a  certain  abritrarily  defined 
age  limit. 

The  development  of  the  Employment  Service  and  the  rapidity  with 
which  it  has  grown  since  becoming  firmly  established  is  illustrated  by 
the  fact  that  in  the  years  1908-1909,  26,477  applications  for  employment 
were  submitted  and  5,000  persons  placed  in  employment,  whereas  during 
the  past  year,  which  might  be  said  to  be  the  first  in  which  the  work  of  the 
U.  S.  Employment 'Service  was  carried  on  anything  like  a  national  scale, 
184,481  applications  were  submitted  and  75,195  were  placed  in  employ- 


1917.]  HOUSE  —  No.  1850.  303 

ment,  which  represented  the  number  of  opportunities  filled  out  of  a  total 
received  of  109,771.  These  figures  do  not  include  harvest  help  and  other 
temporary  placements  which  were  made. 

There  seems  to  be  no  question  in  the  minds  of  the  Bureau  that  no  matter 
how  unfavorable  economic  conditions  may  be  there  is  a  job  somewhere 
for  every  man  or  woman  out  of  work  who  desires  employment.  The 
difficulty  has  been  in  such  times  that  the  knowledge  of  the  existence  of 
jobs  was  not  and  could  not  be  brought  to  the  attention  of  those  seeking 
the  same.  It  is  beyond  the  power  of  individuals  to  get  this  information 
for  themselves  unless  jobs  are  in  the  immediate  vicinity  where  they 
reside.  It  is,  therefore,  the  duty  of  the  Government,  not  only  federal, 
but  state  and  municipal,  to  bend  their  energies,  separately,  if  they  insist 
upon  it,  but  co-operatively  if  effectiveness  is  to  be  secured,  to  the  end 
that  such  information  may  lie  placed  at  the  disposal  of  the  people. 


304  SOCIAL  INSURANCE.  [Feb. 


APPEND ix    D. 


HOURS  OF  LABOR  IN  CONTINUOUS  INDUSTRIES. 

AN   ACT   TO    REGULATE    THE    HOURS    OF    LABOR    OF    CERTAIN   EMPLOYEES 

IN  INDUSTRIAL  ESTABLISHMENTS  OPERATING  DAY  AND  NIGHT. 
Be  it  enacted,  etc.,  as  follows: 

1  SECTION  1.     No  person  who  is  employed  in  any  industrial  estab- 

2  lishment  which  is  in  operation  both  day  and  night,  either  continuously 

3  or  intermittently,  shall,  except  in  case  of  emergency,  be  required, 

4  requested  or  permitted  to  work  more  than  eleven  hours  in  any  con- 

5  tinuous  period  of  twenty-four  hours. 

1  SECTION  2.     Only  a  case  of  danger  to  property,  to  life,  to  public 

2  safety  or  to  public  health  shall  be  considered  a  case  of  emergency 

3  within  the  meaning  of  this  act,  except  in  case  of  employment  for  the 

4  repair,  renewal,  adjustment  or  care  of  machinery  or  appliances  in 

5  order  to  maintain  the  same  in  continuous  operation  and  except  in 

6  case  of  employment  of  a  worker  in  substitution  for  and  in  the  tem- 

7  porary  absence  of  another. 

• 

1  SECTION  3.     Any  owner,  superintendent  or  other  agent  in  any  such 

2  industrial  establishment  who  requires,  requests  or  permits  any  person 

3  therein  employed  to  work  more  hours  than  herein  specified  during 

4  any  contiriuous  period  of  twenty-four  hours,  except  in  case  of  emergency 

5  as  herein  defined,  shall  be  punished  by  a  fine  of  not  less  than  fifty 

6  dollars  nor  more  than  one  hundred  dollars  for  each  offense. 

1  SECTION  4.     It  shall  be  the  duty  of  the  state  board  of  labor  and 

2  industries  to  receive  complaints  concerning  alleged  violations  of  .this 

3  act  and  to  make  or  direct  thereupon  all  needful  and  proper  investiga- 

4  tions  and  prosecutions. 

1  SECTION  5.    This  act  shall  take  effect  on  the  first  day  of  September 

2  in  the  year  nineteen  hundred  and  eighteen. 


1917.]  HOUSE  — No.  1850.  305 


AN  ACT  TO  REGULATE  THE  HOURS  OF  LABOR  OF  CERTAIN  EMPLOYEES 
IN  PAPER  MILLS  OPERATING  DAY  AND  NIGHT. 

Be  it  enacted,  etc.,  as  follows: 

1  SECTION  1.     No  person  who  is  employed  as  a  tour  worker  in  any 

2  paper  mill  which  is  in  operation  both  day  and  night,  either  continuously 

3  or  intermittently,  shall,  except  in  case  of  emergency,  be  required, 

4  requested  or  permitted  to  work  more  than  fortj^-eight  hours  in  any  one 

5  week  nor  more  than  eight  hours  in  any  one  calendar  day. 

1  SECTION  2.    Only  a  case  of  danger  to  property,  to  life,  to  public 

2  safety  or  to  public  health  shall  be  considered  a  case  of  emergency 

3  within  the  meaning  of  this  act,  except  in  case  of  employment  for  the 

4  repair,  renewal,  adjustment  or  care  of  machinery  or  appliances  in 

5  order  to  maintain  the  same  in  continuous  operation  and  except  in 

6  case  of  employment  of  a  tour  worker  in  substitution  for  and  in  the 

7  temporary  absence  of  another. 

1  SECTION  3.    For  the  purpose  of  this  act  the  expression  "tour  work- 

2  ers"  shall  mean  all  employees  who  tend  or  are  employed  for  the  pur- 

3  pose  of  tending  machinery  or  appliances  of  any  description  which  are 

4  operated  both  day  and  night,  either  continuously  or  intermittently, 

5  and  shall  be  deemed  to  include  machine  tenders  and  their  helpers, 

6  cutter  tenders  and  all  other  persons  whose  attendance  is  required  in 

7  consequence  of  the  continuity  of  operation  of  such  machinery  or  ap- 

8  pliances. 

1  SECTION  4.    Any  owner,  superintendent  or  other  agent  in  any  such 

2  paper  mill  who  requires,  requests  or  permits  any  person  therein  em- 

3  ployed  as  a  tour  worker  to  work  more  hours  than  herein  specified 

4  during  any  one  calendar  day  or  during^  any  one  week,  except  in  case 

5  of  emergency  as  herein  defined,  shall  be  punished  by  a  fine  of  not  less 

6  than  fifty  dollars  nor  more  than  one  hundred  dollars  for  each  offense. 

1  SECTION  5.     It  shall  be  the  duty  of  the  state  board  of  labor  and 

2  industries  to  receive  complaints  concerning  alleged  violations  of  this 

3  act  and  to  make  or  direct  thereupon  all  needful  and  proper  investi- 

4  gations  and  prosecutions. 

1  SECTION  6.    This  act  shall  take  effect  on  the  first  day  of  September 

2  in  the  year  nineteen  hundred  and  seventeen. 


SOCIAL  INSURANCE.  [Feb. 


DESCRIPTIVE  ACCOUNT  OF  UNEMPLOYMENT  INSURANCE 
IN  FOREIGN  COUNTRIES. 

Prepared  by  the  Massachusetts  Bureau  of  Statistics. 
,•    INTRODUCTION. 

Unemployment  is  a  form  of  maladjustment  between  the  demands  of 
industry  and  the  supply  of  labor  and  is  one  of  the  fundamental  problems 
confronting  every  nation.  Even  in  times  of  greatest  industrial  activity 
there  is  always  an  "irreducible  minimum  of  unemployment"  due  to  trade 
and  seasonal  fluctuations,  change  of  employment,  or  some  other  cause. 
The  various  European  countries  have  attempted  to  relieve  unemploy- 
ment chiefly  through  systems  of  social  insurance.  Two  methods  of  in- 
surance —  compulsory  and  voluntary  —  have  generally  been  followed. 
Great  Britain  is  the  only  government  which  has  established  a  compulsory, 
contributory  unemployment  insurance  system.  In  most  of  the  continental 
countries  various  schemes  of  voluntary  unemployment  insurance  have 
been  in  operation.  Denmark  grants  a  state  subsidy  to  recognized  societies 
giving  unemployment  benefits.  In  Germany,  on  the  other  hand,  the  gov- 
ernment has  not  provided  a  national  system  of  unemployment  insurance, 
• —  that  function  of  providing  such  insurance  being  performed  by  the 
municipalities  which  have  adopted  systems  modelled  after  the  Ghent 
system,  in  accordance  with  which  public  subsidies  are  granted  to  labor 
organizations  paying  out-of-work  benefits.  In  Belgium,  France,  the 
Netherlands,  Norway,  and  Italy  state  grants  are  made  to  municipal  un- 
employment funds.  In  Switzerland  both  voluntary  and  compulsory 
insurance  are  commonly  found. 

Tlu's  study  briefly  describes  the  various  foreign  systems  in  operation, 
particularly  with  reference  to  their  history,  the  basis  of  contributions, 
the  benefits  granted,  and  their  administration. 

United  Kingdom.  The  Compulsory  Unemployment  Insurance  Act  was 
adopted  December  16,  1911,  and  went  into  effect  July  15,  1912.  It  forms  part  II 
of  the  British  National  Insurance  Act  and  was  amended  in  1914  in  matters  of 
administrative  technique. 

Previous  discussions  of  the  subject  led  up  to  the  Labor  Exchanges  Act  of  1909, 
which  empowered  the  Board  of  Trade  to  establish  a  national  system  of  labor 
registries.  By  December,  1911,  261  of  these  offices  had  been  established. 

The  Act  of  1911  applies  to  construction  and  engineering  occupations  only,  or, 
more  specifically,  to  the  trades  of  building,  shipbuilding,  construction,  mechanical 
engineering,  iron  founding,  manufacture  of  vehicles,  and  sawmilling;  and  affects 
all  workmen  over  18  years  of  age  engaged  in  these  trades.  About  2,400,000 
employees  are  included  at  present  within  the  terms  of  the  Act,  The  Board  of 
Trade  is  given  power,  however,  to  extend  the  Act  to  other  trades.  Those  not  yet 
covered  by  the  law  may  receive  through  voluntary  mutual  aid  associations  giving 
out-of-work  benefits  a  State  Subsidy  of  not  over  one-sixth  of  the  premiums  paid 
out,  provided  the  association  benefit  does  not  exceed  12s.  ($2.92)  a  week.  This 
subsidy  is  paid  from  moneys  granted  by  Parliament  and  is  not  paid  from  the 
National  Unemployment  Fund. 


1917.]  HOUSE  —  No.  1850.  307 

Equal  weekly  contributions  of  2$d.  ($0.05)  are  levied  on  employer  and  employed, 
to  which  the  State  adds  Ifd.  ($0.03)  weekly.  For  casual  labor  Id.  ($0.02)  a  day 
is  due  from  both  parties  concerned,  and  for  three  days'  work  the  regular  week  rate. 
The  worker's  share  may  be  deducted  from  his  wage  by  the  employer,  who  is  re- 
sponsible for  the  combined  payments.  The  latter,  however,  may  claim  reimburse- 
ment of  one-third  of  his  own  contribution  for  any  workman  employed  by  him 
continuously  for  at  least  45  weeks  throughout  one  year.  On  the  other  hand, 
insured  workmen  at  the  age  of  60  may  claim  repayment  of  the  difference,  if  any, 
between  their  contributions  made  and  the  amount  drawn  by  them  in  unemploy- 
ment benefits,  together  with  annual  compound  interest  at  2^  per  cent. 

In  return  for  contributions  the  insured  workman  receives  during  unemployment 
a  weekly  allowance  of  7s.  ($1.70)  from  the  second  to  the  fifteenth  week  in  any  one 
year,  provided  he  has  paid  five  weekly  premiums  for  every  weekly  benefit  claimed. 
Some  other  qualifications  upon  which  receipt  of  the  benefit  is  conditioned,  are: 
That  unemployment  has  not  been  caused  by  strike,  or  lockout,  or  personal  mis- 
conduct; that  work  as  well  paid  as  his  own  cannot  be  obtained  through  the  national 
labor  exchanges;  that  10  full  weekly  contributions  have  been  made.  Workers 
engaged  in  housebuilding  and  construction  receive  a  sum  of  6s.  ($1.46)  a  week; 
boys  under  18,  who  pay  at  the  rate  of  2d.  ($0.04)  per  week;  correspondingly  receive 
but  one-half  benefit. 

These  benefits  may  be  reduced  by  the  Board  of  Trade  in  times  of  industrial 
crises  to  not  less  than  6s.  ($1.46)  per  week  for  a  period  under  15  weeks,  if  necessary. 
Another  precautionary  measure  to  guard  against  excessive  depletion  of  the  Fund 
empowers  the  Board  of  Trade  to  raise  by  not  over  Id.  ($0.02)  the  weekly  dues 
from  both  employer  and  employed.  This  revision  of  contributions  can  be  under- 
taken, however,  only  at  intervals  of  five  years  or  more.  It  is  also  provided  that  if  a 
worker  becomes  chronically  unemployed  from  lack  of  skill,  the  insurance  authorities 
may  require  him  to  attend  such  technical  courses  of  instruction  as  they  may  furnish. 

The  insurance  is  carried  by  the  National  Unemployment  Fund  accumulated 
by  the  payment  of  dues  by  employers  and  workers  and  by  the  addition  of  State 
subsidies  of  one-third  of  these  combined  contributions.  The  total  State  contribu- 
tion paid  in  1913  amounted  to  £378,000  ($1,839,537).  Ten  per  cent  of  the  income 
of  the  Fund  is  applied  to  the  payment  of  administrative  expenses  and  any  remaining 
administrative  expenses  are  paid  by  the  State. 

The  National  Labour  Exchange  Organization  is  an  indispensable  feature  of  the 
law.  Its  430  offices,  together  with  eight  divisional  and  1,066  local  offices,  act  as 
agents  under  the  supervision  of  the  Central  Office,  which  is  a  department  of  the 
Board  of  Trade.  Existing  trade  unions  giving  an  unemployment  allowance  may 
also  become  agents  and  may  claim  a  refund  qn  benefits  paid  not  exceeding  two- 
thirds  of  the  amount  the  union  itself  has  expended  for  this  purpose.  The  umpire 
appointed  by  the  Crown  for  the  settlement  of  differences  is  independent  of  the 
Board  of  Trade  and  his  decisions  are  final. 

During  1912-1913,  105  trade  unions  with  an  estimated  membership  of  539,775, 
and  172  unions  with  an  estimated  membership  of  376,041  in  non-insured  trades, 
made  arrangements  with  the  Board  of  Trade  to  obtain  the  State  subsidy  for 
out-of-work  benefit.  The  industries  most  fully  represented  were  the  textile,  boot 
and  shoemaking,  printing  and  paper  trades.  The  total  expenditure  as  unemploy- 
ment benefits  between  January  8  and  July  11,  1913,  when  benefits  were  payable, 
was  approximately  £236,458  ($1,150,723),  representing  774,494  payments. 

Denmark.  A  law  passed  April  9,  1907,  to  take  effect  August  1,  1907,  provided 
for  public  assistance  of  voluntary  insurance  against  unemployment  in  Denmark. 
This  act  was  subsequently  amended,  in  regard  to  the  scope  of  membership  and 
limits  of  subsidies,  on  April  8,  1914,  enacted  April  1,  1915.  The  law  affects  all 
workers  "without  means"  between  the  ages  of  18  and  60,  who  are  members  of 
recognized  associations  furnishing  insurance  against  unemployment  and  who  have 
paid  dues  for  at  least  1  year.  Wage-  earners  serving  with  the  colors  are  exempt  from 
the  law. 


308  SOCIAL  INSURANCE.  [Feb. 

Out-of-work  benefit  is  given  after  a  waiting  period  of  from  6  to  15  days  —  up 
to  1  month  in  seasonal  trades  —  in  the  form  of  £  ($0.134)  to  2  Kroner  ($0.54) 
per  day  for  70  to  160  days  in  any  one  year.  If  such  an  allowance  has  been  received 
by  a  member  for  210  successive  days,  a  full  year  must  elapse  during  which  fees  must 
be  regularly  paid  before  he  is  entitled  to  further  cash  aid.  If  temporary  work  at 
lower  wages  is  found  and  accepted,  the  association  may  augment  that  wage  to  the 
limit  of  the  cash  grant  which  a  member  can  claim.  Out-of-work  benefit  may  also  be 
made  in  the  form  of  immediate  payments  for  travel  or  removal,  assistance  towards 
rent,  or  of  gifts  in  kind.  Members  refusing  other  work  offered  them,  receiving 
poor-relief  or  sick-aid,  and  members  in  prison  are  granted  no  benefits. 

Under  the  old  law  recognized  associations  with  a  yearly  minimum  membership 
of  50  received  for  their  special  unemployment  fund  an  annual  State  subsidy  of 
one-third  the  total  amount  of  premiums  paid  by  members  up  to  a  maximum  limit 
of  250,000  kroner  ($67,000),  while  the  communal  and  municipal  reimbursements 
amounted  each  to  one-sixth  of  such  premiums.  Under  the  new  law  these  subsidies 
are  increased  to  one-half  and  one-third,  respectively;  provided  that,  if  necessary, 
the  State  grant  may  be  reduced  or  withheld  in  any  year  so  as  not  to  exceed  the 
total  of  999,538  kroner  ($267,876)  given  in  1913-1914;  and  that  the  amount  paid 
by  the  communes  to  societies  within  their  districts  may  equal  one-third  of  total 
contributions  of  full  members.  In  1914  the  dues  paid  by  139,500  members  amounted 
to  1,658,648  kroner  ($444,518)  and  the  57  recognized  associations  received  in  that 
year  a  communal  subsidy  of  448,701  kroner  ($120,252). 

The  supervising  authority  is  vested  in  a  salaried  Government  Inspector  under 
the  Minister  of  the  Interior.  This  inspector  is  also  Chairman  of  the  Insurance 
Commission.  Its  six  representatives,  of  whom  four  must  be  members  of  the  Danish 
Parliament,  are  selected  from  among  the  delegates  sent  to  the  annual  meeting  by 
each  association.  They  hold  office  for  six  years,  three  retiring  every  third  year. 

Germany.  The  Imperial  Government  has  thus  far  not  undertaken  insurance 
against  unemployment,  and  when  the  subject  came  up  for  discussion  in  the  Reichs- 
tag, the  Government  was  not  favorable  to  schemes  of  assisted  insurance.  The 
question  was  also  discussed  in  the  parliaments  of  some  of  the  Federated  States, 
but  proposals  made  in  1910  were  rejected  by  Saxony  and  Wurtemberg.  The  general 
feeling  is  that  the  Imperial  Government  should  take  the  initiative  in  measures 
regarding  this  branch  of  insurance. 

A  number  of  large  German  municipalities  adopted  the  Ghent  system  of  unemploy- 
ment insurance,  or  a  modified  form  of  it,  and  their  schemes  are  carried  out  in  close 
connection  with  labor  exchanges.  Organizations  have  existed  in  Cologne  since 
1896;  Leipsic,  since  1905;  Strassburg,  since  1906;  Erlangen  and  Muhlhausen 
since  1909;  Freiburg,  since  1910;  Heidelberg  and  Niirnberg,  since  1911.  Each 
organization  has  its  own  method  of  administration  and  assistance.  Plans  for 
municipal  unemployment  insurance  are  under  consideration  in  Berlin,  Hamburg, 
Munich,  and  other  cities. 

Belgium.  Voluntary  insurance  against  unemployment  is  assisted  in  Belgium 
by  the  communes,  the  provinces,  and  the  State  through  subsidies  to  trade  unions 
giving  out-of-work  benefits.  This  system  of  liberal  subsidies  was  first  developed 
in  1901  in  Ghent,  and  has  been  adopted  since  then  by  ah*  municipalities  with  a 
population  of  over  35,000.  Later  the  provinces  joined  in  the  scheme,  and  since 
1907  the  State  has  granted  a  small  subsidy  to  insurance  effected  through  communal 
unemployment  funds  and  trade  unions  affiliated  to  communal  funds,  and  to 
recognized  unaffiliated  associations  giving  out-of-work  benefits. 

By  order  of  January  30,  1911,  a  permanent  committee  of  15  was  established 
under  the  supervision  of  the  Minister  of  Industry  and  Labor.  The  members  of 
this  committee  are  chosen  from  among  the  recognized  trade  unions,  the  labor 
exchanges,  and  the  institutions  insuring  against  involuntary  unemployment. 
They  hold  office  for  four  years  and  may  meet  four  times  a  year.  The  function  of 
this  committee  is  to  assist  the  Government  in  advising  and  developing  the  most 


1917.]  HOUSE  —  No.  1850.  309 

effective  means  of  guarding  against  the  consequences  of  involuntary  unemploy- 
ment. 

The  communal  funds  pay  subsidies  through  the  trade  unions,  with  the  exception 
of  Liege,  where  the  grant  is  paid  to  individual  trade-unionists  after  the  system 
adopted  at  Ghent.  Since  the  distribution  is  effected  through  the  unions,  the  admin- 
istrative cost  for  the  communal  schemes  is  comparatively  low.  Each  province  has 
its  own  method  of  distributing  its  subsidy.  The  State  grant  is  in  proportion  to 
the  unemployment  benefit  disbursed.  It  usually  equals  60  per  cent,  but  cannot 
exceed  100  per  cent,  of  the  original  allowance  paid  and  is  not  paid  to  the  same 
person  for  more  than  60  days  in  any  one  year. 

France.  Unemployment  insurance  in  France  is  assisted  through  existing 
trade  unions  in  about  14  departments,  86  communes,  and  a  number  of  large  munic- 
ipalities. Among  the  latter  are  Paris,  Lyons,  Limoges,  Dijon,  Armentieres,  and 
Roubaix,  some  of  which  adopted  the  Ghent  insurance  system.  The  State  has 
granted  a  small  annual  subsidy  since  1905  to  unemployment  insurance  associations. 

As  a  temporary  war  measure  a  National  Fund  for  Unemployment  was  proposed 
on  August  20,  1914,  and  established  together  with  communal  and  departmental 
funds,  by  three  Acts  in  1914.  In  1914,  also,  a  central  labor  exchange  for  unemployed 
and  refugees  was  opened.  State  grants,  fixed  at  33  per  cent  of  the  benefits  dis- 
bursed, may  be  paid  out  of  the  National  Fund  to  these  other  funds,  provided  the 
communities  have  a  population  of  at  least  10,000.  It  is  expected  that  in  the  future 
better  industrial  conditions  will  make  the  continuance  of 'this  measure  unnecessary. 
For  the  present,  individual  benefits  during  periods  of  unemployment  must  not  be 
more  than  1.25  francs  ($0.24)  for  every  unemployed  head  of  a  family,  and  50 
centimes  ($0.10)  for  every  dependent  or  out-of-work  person  living  in  the  family. 

Netherlands.  Since  1906  insurance  against  unemployment  in  the  Netherlands 
has  been  assisted  (following  the  Ghent  plan)  by  at  least  25  municipalities,  includ- 
ing Amsterdam,  The  Hague,  Leyden,  Zwolle,  Utrecht,  Haarlem,  and  others.  As 
early  as  1907  the  Government  proposed  payment  of  a  subsidy  to  assisted  insurance; 
but  no  action  was  taken  in  the  matter  at  the  time.  In  1914,  however,  the  State 
contributed  for  this  purpose  555,672.63  florins  ($223,380)  and  voted  in  1915  to 
spend  12,297,525  florins  ($4,943,605). 

In  1914  there  were  28  communal  and  306  affiliated  and  other  insurance  funds 
against  unemployment,  with  a  total  membership  of  34,533.  The  benefits  paid  in 
that  year  amounted  to  1 ,33 1,010.78  florins  ($535 ,066) .  Twenty-nine  labor  exchanges 
in  the  kingdom  found  in  1914  employment  for  46,055  men  and  39,195  women. 

Norway.  In  1904  a  commission  was  appointed  to  make  a  preliminary  study 
of  unemployment  insurance  in  Norway.  On  June  12,  1906,  an  act,  modelled  on 
the  Ghent  system,  was  passed  to  take  effect  October  1,  1906,  subject  to  revision  in 
1911,  granting  State  subsidies  to  voluntary  trade  unions  providing  out-of-work 
benefits.  The  act  was  amended  on  July  25,  1908,  in  respect  of  increase  in  the  rates 
of  State  subsidy.  On  August  15,  1911,  the  act  was  renewed  to  remain  in  force  until 
December  31,  1914.  It  was  again  renewed  August  6,  1915.  The  act  applies  to 
all  trade  unions  which  grant  insurance  against  unemployment  to  their  members, 
as  well  as  to  recognized  trade  unions,  if  one-half  of  their  revenue  consists  of  members' 
contributions  paid  for  at  least  26  successive  weeks.  Any  wage-earner  desiring 
insurance  against  unemployment,  and  following  the  same  trade  as  a  union  member, 
must  be  admitted  to  regular  membership,  irrespective  of  his  objection  to  the 
general  policy  of  the  trade  union.  But  such  a  member  can  neither  vote  nor  par- 
ticipate in  administering  funds;  and  can  be  required  to  pay  from  10  to  25  per  cent 
more  toward  the  cost  of  administration. 

The  maximum  limit  of  out-of-work  benefit  is  one-half  the  usual  normal  wage, 
and  is  paid  only  to  members  of  six  months'  standing.  Payment  begins  on  the 
third  day  of  unemployment  and  continues  for  not  more  than  90  days  in  the  year 
to  the  same  person.  It  is  limited  by  law  to  Norwegian  citizens  or  to  those  who  have 
been  residents  in  Norway  for  five  consecutive  years;  to  insured  persons  whose 


310  SOCIAL  INSURANCE.  [Feb. 

unemployment  is  due  only  to  want  of  work;  and  to  wage-earners  who  are  members 
of  not  more  than  one  association.  No  allowance  is  paid  during  unemployment 
caused  by  strike  or  lock-out;  or  to  members  refusing  work  offered  them  by  the 
administration  of  the  association. 

The  original  State  subsidy  of  one-quarter  of  the  annual  unemployment  benefit 
disbursed,  was  raised  by  amendment  in  1908  to  one-third  of  the  amount.  This 
sum  is  paid  in  the  £ rst  instance  by  the  central  government,  but  two-thirds  of  the 
grant  are  annually  recovered  from  the  local,  rural,  or  urban  authorities,  except  in 
the  case  of  workmen  employed  on  public  railways,  roads,  and  similar  works. 

The  trade  unions  are  closely  allied  in  their  control  of  unemployment  with  existing 
public  labor  exchanges.  The  administration,  in  turn,  is  controlled  by  communal 
insurance  commissioners  elected  for  a  term  of  three  years,  and  supervised  by  the 
central  Government. 

In  1913,  18  trade  unions  received  from  30,329  members  fees  amounting  to  211,392 
kroner  ($56,653);  communal  subsidies  of  35,528  kroner  ($9,522),  and  a  State  grant 
of  7,612  kroner  ($2,040).  Out-of-work  benefits  amounting  to  180,922  kroner 
($48,487)  were  paid  to  5,027  members  for  98,395  days  of  unemployment.  The 
cost  of  administration  in  that  year  was  6,744  kroner  (SI, 807). 

Italy.  A  few  large  municipalities  in  Italy  grant  subsidies  to  trade  associations 
having  unemployment  insurance  funds.  In  Milan  a  privately  endowed  philan- 
thropic fund,  the  Humanitarian  Society,  has  paid  an  unemployment  subsidy 
since  1905.  Padua  first  voted  a  subsidy  in  1909;  Brescia,  in  1910;  Turin,  Modena, 
and  other  towns  are  having  proposals  under  discussion.  In  July,  1910,  a  bill  passed 
the  Italian  Chamber  proposing  a  State  subsidy  of  4000  lire  ($772)  to  associations 
having  at  least  50  members  and  paying  out-of-work  benefits.  This  bill  passed 
the  Senate  in  October,  1910,  but  no  official  statistics  are  available  relative  to  its 
operation. 

The  subsidy  paid  at  Milan  is  at  the  rate  of  50%  of  the  out-of-work  benefit  which 
may  be  given  for  60  days  in  the  year.  The  system  is  managed  by  a  committee  of 
four  members,  two  representing  the  Humanitarian  Society,  and  two  the  affiliated 
associations. 

Switzerland.  Schemes  of  compulsory  insurance  against  unemployment  were 
proposed  in  the  Town  Council  of  Zurich  in  1898,  but  were  not  then  adopted.  On 
December  21,  1914,  the  Cantonal  Council  of  Zurich,  however,  voted  a  grant  of 
15,000  francs  ($2,895)  for  the  assistance  of  trade  union  unemployment  funds. 
Proposals  relative  to  such  insurance  were  made  to  the  legislative  body  at  Basle, 
and  a  bill  was  passed  by  the  Great  Council  in  1899,  but  on  being  submitted  to 
referendum  this  bill  was  decisively  rejected.  A  private  scheme  of  unemployment 
insurance,  established  in  1901  by  the  Basle  Labor  Federation  had  to  be  abandoned 
ultimately.  St.  Gall  is  the  only  place  where  insurance  against  unemployment  was 
made  compulsory.  It  became  operative  in  1894,  and  was  continued  for  some  years. 
As  it  was  administered  by  the  Poor  Law  Department  and  therefore  connected  in 
the  minds  of  the  people  with  poor-relief,  the  better  class  of  workmen  bitterly  opposed 
the  plan.  This  resulted  in  its  failure  and  its  early  abandonment.  In  1904  Geneva 
founded  a  scheme  on  the  Berne  model  to  be  operated  in  connection  with  the  labor 
office,  but  the  city  finally  relinquished  it  as  the  workmen  did  not  respond  to  it  and 
trade-unions  were  hostile. 

Subsidized  unemployment  insurance  has  been  more  favorably  accepted  in 
Switzerland.  The  first  municipal  unemployment  insurance  fund  was  established 
by  Berne  in  April,  1893.  This  fund  is  connected  with  the  labor  exchange  and 
both  are  administered  by  a  committee  of  nine  members,  holding  office  for  four 
years.  The  plan  is  restricted  to  workmen  under  60  years  of  age,  who  are  Swiss 
citizens  and  residents  of  Berne.  The  rate  of  contribution  is  low,  and  the  same  rate 
is  paid  by  skilled  and  unskilled  workers.  Benefit  is  received  for  not  more  than,  60 
days  in  a  year.  It  is  paid  for  unemployment  only  during  the  winter  months,  and 
is  somewhat  higher  for  members  with  dependents.  No  benefit  is  granted  for  the 


1917.]  HOUSE  — No.  1850.  311 

first  week  of  unemployment.  In  Geneva  in  1909  the  scheme  adopted  in  1904, 
which  had  utterly  failed,  was  replaced  by  one  following  the  Strassburg  example, 
in  accordance  with  which  assistance  is  guaranteed  for  ten  years  at  the  rate  of  60%  of 
benefits  disbursed,  to  associations  providing  insurance  against  unemployment. 
Their  members  must  have  resided  at  least  one  year  in  Geneva,  and  benefits  are  paid 
to  the  same  person  for  not  more  than  60  days  in  any  one  year.  After  the  earlier 
failures  of  1899  and  1901  the  cantonal  government  of  Basle  again  considered  the 
unemployment  problem.  The  Great  Council,  after  considering  preliminary  pro- 
posals, enacted  the  law  of  December  16,  1909,  establishing  a  State  Unemployment 
Fund,  to  take  effect  May  2,  1910.  Any  wage-earner  over  17  years  of  age  may 
insure  himself  if  he  has  resided  at  Basle  for  at  least  six  months  previous,  and  if 
he  is  not  already  a  member  of  a  private  unemployment  fund. 

Contributions  vary  according  to  -work,  earnings,  and  family  circumstances  and 
benefits  are  in  proportion  to  these  varying  rates  of  contribution.  From  the  fourth 
day  of  involuntary  unemployment  full  benefit  of  not  more  than  two-thirds  of  the 
normal  wage  is  paid  for  35  days;  for  the  remaining  35  days,  half-benefit  is  paid. 
A  special  traveling  benefit  is  paid  to  those  taking  up  work  offered  them  outside 
the  canton. 

The  State  defrays  the  cost  of  establishing  and  administering  the  Fund,  and 
grants  an  annual  subsidy  limited  to  35,000  francs  ($6,755)  for  the  first  three  years. 
The  Fund  is  controlled  by  a  comirittee  of  eleven  members,  who  hold  office  for 
three  years  and  \\ho  are  under  the  supervision  of  the  Department  of  the  Interior. 
The  Executive  Council  of  Basle  appoints  six  of  these  members,  and  the  other  five 
are  chosen  by  the  insured  persons  from  among  themselves.  Members  receive  two 
francs  ($0.39)  for  every  meeting  attended.  The  Fund  grants  two  kinds  of  subsidies 
to  voluntary  associations  providing  unemployment  insurance.  A  subsidy  of  from 
20  to  40%  of  membership  dues  is  paid  into  a  reserve  fund  providing  for  periods  of 
crises.  If  this  reserve  fund  exceeds  a  certain  fixed  limit,  the  subsidy  may  be 
suspended.  The  other  subsidy  of  from  30  to  60%  of  out-of-work  benefits  disbursed 
may  be  spent  at  will  by  the  association  for  purposes  of  insurance  against  unemploy- 
ment. Payment  of  this  grant  may  be  discontinued  if  the  total  property  of  the 
association  exceeds  a  certain  fixed  amount.  St.  Gall  has  also  paid  a  small  municipal 
subsidy  since  1905. 

Of  more  importance,  however,  are  the  measures  taken  by  the  Swiss  lace  and 
embroidery  industry.  An  emplpyers'  association  was  formed  at  St.  Gall  which 
proposed  to  subsidize  special  "crisis  funds"  providing  against  industrial  depression. 
The  three  trade-unions  promoted  the  scheme  warmly,  so  that  by  December,  1908, 
fifty  such  "crisis  funds"  had  been  formed.  The  rates  of  contribution  are  slightly 
lower  for  women  than  for  men.  An  allowance  is  given  to  the  same  person  from 
the  second  day  of  unemployment  up  to  a  maximum  of  1.50  francs  ($0.29)  per  day 
for  50  days  in  the  year.  Thus  the  subsidy  paid  by  the  employers'  association  js 
60%  of  the  benefit  provided.  Appenzell  &-Rhin  also  pays  a  cantoral  subsidy  of 
50%  of  unemployment  benefit  to  "crisis  funds"  in  the  embroidery  industry. 


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